After yesterday's earnings it is clear that Fannie Mae atleast--Freddie Mac is set to release its earnings later thisweek--will be out of funds by the end of the year. Whether, or inwhat form, it may receive additional support, though, is unclear.According to media accounts that quote anonymous sources, itappears that the Treasury Department is reluctant to revisit theterms of the conservatorship.
The terms of the conservatorship do not appear to be working forFannie Mae, Peter Cohan, principal of the economic consulting firmPeter Cohan & Assoc., tells GlobeSt.com. "The limiting factorin its ability to continue to support the housing market is howmuch government money will go into the company. If it were aprivate company I doubt if investors would see much value inputting new money into it."
Essentially it is a political decision, he continues, and thefact that the Administration is poised to change hands may be partof the current uncertainty.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
