U.S. Foresaw Better Return in Seizing Fannie and Freddie Profits<br />1 option was changing the terms of the bailout to “replace the current 10 percent fixed dividend with a permanent ‘net worth sweep.’” The memo noted<br />that Freddie Mac was “expected to be net income positive by the end of 2012 and Fannie by the end of 2013.”<br />Another unsealed document, a draft memorandum circulated before the profit sweep, shows<br />that federal officials recognized it would generate more money than the original bailout terms.<br />The materials also show that government officials involved in the decision to divert the profits knew the change would most likely generate more money for<br />Treasury than the original rescue terms, which required the companies to pay taxpayers 10 percent annually on the bailout assistance they had received.<br />Documents recently unsealed in a lawsuit against the federal government by Fannie Mae<br />and Freddie Mac shareholders shed light on a crucial 2012 policy change by the Treasury Department.<br />But newly unsealed documents show that as early as December 2011, high-level Treasury officials knew<br />that Fannie and Freddie would soon become profitable again.
