WASHINGTON, Aug 17 (Reuters) – The U.S. Treasury said on
Friday it is changing the way Fannie Mae and Freddie Mac will
repay taxpayers in a move the Obama administration said would
accelerate the winding down of the government-owned mortgage
financiers.
The finance companies, which buy mortgages from lenders and
repackage them as securities for investors, will now be required
to hand over all their profits to the U.S. Treasury instead of
the 10 percent dividend repayment required under the terms of
their government bailout.
Both companies reported strong profits in the second quarter
and did not need to ask the U.S. Treasury for additional
taxpayer aid to stay solvent.
The Treasury said this change would ensure that “every
dollar of earnings that Fannie Mae and Freddie Mac generate will
be used to benefit taxpayers for their investment in those
firms.”
The companies, which were taken over by the government
during the financial crisis, will also be required to reduce
their investment portfolios at an annual rate of 15 percent
instead of the previous 10 percent.
