WASHINGTON, DC-Fannie Mae’s resounding Q3 loss–$29 billion–that was reported yesterday, is raising new questions about the GSEs’ role in the mortgage markets going forward. Even after Fannie Mae and Freddie Mac were put into conservatorship earlier this Fall, the standard line has been the agencies are still necessary to support mortgage finance. Together the two companies own or guarantee about half of all US home loans. The two companies are also essential providers of finance to multifamily projects.

After yesterday’s earnings it is clear that Fannie Mae at least–Freddie Mac is set to release its earnings later this week–will be out of funds by the end of the year. Whether, or in what form, it may receive additional support, though, is unclear. According to media accounts that quote anonymous sources, it appears that the Treasury Department is reluctant to revisit the terms of the conservatorship.

The terms of the conservatorship do not appear to be working for Fannie Mae, Peter Cohan, principal of the economic consulting firm Peter Cohan & Assoc., tells GlobeSt.com. “The limiting factor in its ability to continue to support the housing market is how much government money will go into the company. If it were a private company I doubt if investors would see much value in putting new money into it.”

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