Fannie and Freddie: A peek at the future

March 3, 2009 — 2:50pm ET | By Jim Kim

Not too long ago, government officials were fairly adamant that Fannie Mae and Freddie Mac would not remain in government hands for very long. But with every passing day, it looks more like the two entities have become extensions of the federal government. The New York Times notes the two GSEs (a quaint term now) have been given access to as much as $400 billion in taxpayer dollars, a sum more than twice the amount received by Citi, Bank of America, JPMorgan, General Motors, Wells Fargo, Goldman Sachs and Morgan Stanley.

A whole range of government-driven mortgage modification and relief programs have been promulgated through them as well. The CEO of Freddie stepped down after less than six months on the job because of the low pay and "second guessing by government officials." The Times notes a simple fact: The entities cannot become private again until they pay back the bailout money. That could take a lifetime.

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