If investors believed that Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) will soon start paying their dividends then its time to face the reality. Researchers claim that the investors have misinterpreted the figures. The mortgage finance giant was put into conservatorship in 2008 and was rescued with taxpayer funds.
Taxpayers funds not paid
As much as $71.3 billion of taxpayers’ funds went into saving Federal Home Loan Mortgage Corp (OTCBB:FMCC), while the mortgage giant has returned $91 billion to the government. The investors assumed that the company has fully repaid the taxpayers and it’s time for their share. But, according to researchers at the Federal Reserve Bank of New York, the company is not yet free from its obligation of repayment to taxpayers.
Structure debated
Separately Senate Banking Committee leader indicated that Federal Home Loan Mortgage Corp (OTCBB:FMCC) will remain under the U.S. conservatorship for at least two years as structure of a new housing finance system is debated. Richard Shelby said that it would be better to keep the mortgage-finance company under federal control than to pass a bill allowing the government to guarantee mortgages. Earlier Shelby opposed a Senate bill that suggested the replacement of Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Fannie Mae with government insurers, which will absorb losses behind private investors. It is up to Shelby to propose an alternative route to structure the mortgage finance companies.
Shelby stated that he was left with another important unfinished business ahead of Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Fannie Mae issue. He added that he does not want to make matter worse by taking wrong decisions. After being bailed out, both Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) regained profitability and guarantees nearly half of the outstanding home loans at present.
Federal Home Loan Mortgage Corp (OTCBB:FMCC) closed at $2.39 in its last trading session.