With the passing of Freddie Mac’s PAC, can final foreclosure for Fannie Mae’s political fund be far behind? Fannie Mae PAC shows $100 cash on hand as of its latest report. The committee handed out refunds to donors at the end of 2008.
The Post notes the latest $400 billion provided to the companies.
The companies, both based in the Washington area, were seized by the government in September to stabilize their role as the main funding source for mortgage lending. Fannie and Freddie buy loans from originators such as banks, allowing new loans to be made before existing ones are repaid.
At the time, the government promised to cover the companies’ losses, injecting money in any quarter when the companies’ liabilities exceed their assets, up to $100 billion each. Fannie and Freddie raise money from private investors to fund their loan purchases, and the government wanted to reassure those investors that the companies would be able to repay their debts.
Officials said in September that $200 billion was much more money than the companies would need. Officials now acknowledge that won’t be enough to calm investors. Yesterday, they said that $400 billion would be much more money than the companies would need.
A September 2008 Freddie Mac press release indicated that political and lobbying activities had ceased.