{
  "id": "R44525",
  "type": "CRS Report",
  "typeId": "R",
  "number": "R44525",
  "active": true,
  "source": "CRSReports.Congress.gov, EveryCRSReport.com",
  "versions": [
    {
      "source_dir": "crsreports.congress.gov",
      "title": "Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions",
      "retrieved": "2020-09-07T12:22:16.094195",
      "id": "R44525_6_2020-07-22",
      "formats": [
        {
          "filename": "files/2020-07-22_R44525_c8566d9057f40a49e035649fe6061f885f897fe7.pdf",
          "format": "PDF",
          "url": "https://crsreports.congress.gov/product/pdf/R/R44525/6",
          "sha1": "c8566d9057f40a49e035649fe6061f885f897fe7"
        },
        {
          "format": "HTML",
          "filename": "files/2020-07-22_R44525_c8566d9057f40a49e035649fe6061f885f897fe7.html"
        }
      ],
      "date": "2020-07-22",
      "summary": null,
      "source": "CRSReports.Congress.gov",
      "typeId": "R",
      "active": true,
      "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R44525",
      "type": "CRS Report"
    },
    {
      "source": "EveryCRSReport.com",
      "id": 599289,
      "date": "2019-05-31",
      "retrieved": "2019-12-20T19:00:12.265519",
      "title": "Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions",
      "summary": "Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and promote homeownership for underserved groups and locations. The GSEs purchase mortgages, retain the credit risk (for a fee), and package them into mortgage-backed securities (MBSs) that they either keep as investments or sell to institutional investors. In the years following the housing and mortgage market turmoil that began around 2007, the GSEs experienced financial difficulty. By 2008, the GSEs\u2019 financial condition had weakened, generating concerns over their ability to meet their combined obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed at the time. In response, the Federal Housing Finance Agency (FHFA), the GSEs\u2019 primary regulator, took control of them in a process known as conservatorship. \nSubject to the terms of the Senior Preferred Stock Purchase Agreements (PSPAs) between the U.S. Treasury and the GSEs, Treasury provided funds to keep the GSEs solvent. The GSEs initially agreed to pay Treasury a 10% cash dividend on funds received, and dividends were suspended for all other GSE stockholders. If the GSEs had enough profit at the end of the quarter, the dividend came out of the profit. When the GSEs did not have enough cash to pay their dividend to Treasury, they asked for additional cash to make the payment instead of issuing additional stock. After subsequent amendments to the PSPAs, the 10% dividend was replaced with a \u201cprofit sweep\u201d dividend. For each GSE, Treasury currently receives all of the net worth in excess of $3 billion capital reserve under the profit sweep.\nAs of the date of this report, the GSEs have paid dividends totaling $292 billion to Treasury. The majority of this sum\u2014$191 billion\u2014has been paid under the profit sweep. Paying the federal government all profits earned in a quarter prevents the GSEs from accumulating funds to redeem the senior preferred stock, which is held only by Treasury. Since the second quarter of 2012, the GSEs have drawn on their support from Treasury only in the fourth quarter of 2017.\nAs a result of continuing conservatorship, congressional interest in Fannie Mae and Freddie Mac has increased in recent years. Uncertainty in the housing, mortgage, and financial markets has raised concerns about the potential total costs to Treasury of providing a backstop for the GSEs. Because more than 60% of households are homeowners, a large number of citizens could be affected by the future of the GSEs. Congress exercises oversight of the FHFA and may consider legislation to shape the GSEs\u2019 future. As of the date of this report, no such legislation has been introduced in the 116th Congress, but Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo has released an outline for potential housing finance reform legislation. The committee held hearings on March 26 and March 27, 2019, on the outline. Also on March 27, 2019, President Trump issued a memorandum directing his Administration to develop a plan for legislative and administrative reforms to the housing finance system.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
      "formats": [
        {
          "format": "HTML",
          "encoding": "utf-8",
          "url": "https://www.crs.gov/Reports/R44525",
          "sha1": "b9f80ee5ab5e5013214e8fa6d0b785d5b824805b",
          "filename": "files/20190531_R44525_b9f80ee5ab5e5013214e8fa6d0b785d5b824805b.html",
          "images": {
            "/products/Getimages/?directory=R/html/R44525_files&id=/0.png": "files/20190531_R44525_images_6767495233a60f44cb1020cf9c4d137ab2318d31.png",
            "/products/Getimages/?directory=R/html/R44525_files&id=/2.png": "files/20190531_R44525_images_d15be509b2344f8a5cf3ad6ba90ee78b94ef346d.png",
            "/products/Getimages/?directory=R/html/R44525_files&id=/1.png": "files/20190531_R44525_images_9d3efa0a3309c5c79fb0c9be4b1b7e9be7eadeb8.png",
            "/products/Getimages/?directory=R/html/R44525_files&id=/3.png": "files/20190531_R44525_images_85b6676cbc80884be2498fc47e47a44f1fb492dc.png"
          }
        },
        {
          "format": "PDF",
          "encoding": null,
          "url": "https://www.crs.gov/Reports/pdf/R44525",
          "sha1": "7c63b02244db7c8825750afd7523ce985380fce7",
          "filename": "files/20190531_R44525_7c63b02244db7c8825750afd7523ce985380fce7.pdf",
          "images": {}
        }
      ],
      "topics": [
        {
          "source": "IBCList",
          "id": 4776,
          "name": "Housing Finance"
        },
        {
          "source": "IBCList",
          "id": 4918,
          "name": "Homeownership & Housing Finance"
        }
      ]
    },
    {
      "source": "EveryCRSReport.com",
      "id": 453422,
      "date": "2016-06-15",
      "retrieved": "2016-09-09T19:23:35.936276",
      "title": "Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions",
      "summary": "Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations. They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs\u2019 explicit guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. \nIn 2008, the GSEs\u2019 financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market. The GSEs accepted going into conservatorship, and Treasury agreed to provide up to $200 billion each to keep them solvent.\nThe GSEs agreed to pay Treasury a 10% cash dividend on funds received. If the GSEs do not have sufficient cash, they can pay Treasury a 12% dividend in special stock. Dividends were suspended for all other stockholders. If the GSEs had enough profit at the end of the quarter, the dividend came out of the profit. When the GSEs actually did not have enough cash to pay their dividend to Treasury, they asked for additional cash to make the payment instead of issuing additional stock. In August 2012, the 10% dividend was replaced with a \u201cprofit sweep\u201d dividend. Under the profit sweep, Treasury received all of the profits above a declining capital reserve, but if there was no profit, there was no dividend.\nThe GSEs have paid dividends totaling $246 billion to Treasury. The majority of this sum\u2014$191 billion\u2014has been paid under the profit sweep. Paying the federal government all profits earned in a quarter prevents the GSEs from accumulating funds to redeem the senior preferred stock, which is held only by Treasury.\nThe GSEs have not taken a draw on their support from Treasury since the second quarter of 2012.\nCongressional interest in Fannie Mae and Freddie Mac has increased in recent years, primarily because of the federal government\u2019s continuing conservatorship of these GSEs. Uncertainty in the housing, mortgage, and financial markets has raised doubts about the future of the enterprises and the potential cost to the Treasury of guaranteeing the enterprises\u2019 debt. Since more than 60% of households are homeowners, a large number of citizens could be affected by the future of the GSEs. Congress exercises oversight over the Federal Housing Finance Agency (FHFA), which is both regulator and conservator of the GSEs, and is considering legislation to shape the future of the GSEs.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
      "formats": [
        {
          "format": "HTML",
          "encoding": "utf-8",
          "url": "http://www.crs.gov/Reports/R44525",
          "sha1": "55b6f23c137f3986275a02e5cbb05d3535eae841",
          "filename": "files/20160615_R44525_55b6f23c137f3986275a02e5cbb05d3535eae841.html",
          "images": null
        },
        {
          "format": "PDF",
          "encoding": null,
          "url": "http://www.crs.gov/Reports/pdf/R44525",
          "sha1": "4b6984ecac392bea70ff5f6c1eafa5adfe818ad9",
          "filename": "files/20160615_R44525_4b6984ecac392bea70ff5f6c1eafa5adfe818ad9.pdf",
          "images": null
        }
      ],
      "topics": [
        {
          "source": "IBCList",
          "id": 2869,
          "name": "Housing Finance Reform"
        }
      ]
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}