Thursday, June 17, 2010

$145B in Bailouts Later: Fannie, Freddie to be De-Listed

Freddie Mac

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The regulator over Fannie Mae and Freddie Mac today said it has ordered the de-listing from U.S. stock exchanges of the two mortgage-financing giants, virtually confirming their finale as valued private firms – 21 months after they became wards of the U.S. government.

Federal Housing Finance Agency Acting Director Edward J. DeMarco said the order was related to stock-exchange minimum-price requirements. Fannie and Freddie have been under U.S. conservatorship since September 2008, when massive losses mounted from faltering subprime mortgages.

“A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets,” said DeMarco.

But market analysts see the move as one step toward the long-anticipated overhaul of Fannie and Freddie, which was left out of the current financial overhaul reform being hatched out by a House-Senate conference committee.

Obama Administration officials have yet to produce a game plan for the overhaul, but have been seeking public feedback from market participants, experts and organizations on the future of the U.S. housing finance system.

Fannie and Freddie have drawn $145 billion from the U.S. Treasury in bailouts under an open-ended credit facility to replenish quarterly deficits. The bailout mechanism, slated to run through 2012, has been the lynchpin of criticism from Republicans, who have pushed for the phasing out of the two companies in favor of fully privatizing mortgage funding.

$145B in Bailouts Later: Fannie, Freddie to be De-Listed

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