Taxpayer, Bank Bailout | featured news

The Treasury said on Friday it is changing the way Fannie Mae and Freddie Mac will repay taxpayers in a move the Obama administration said would accelerate the winding down of the government-owned mortgage financiers.

Fannie Mae and Freddie Mac, the two mortgage-finance giants, this week reported some of their best quarterly results since the real estate collapse. On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.

Mortgage finance giant Freddie Mac FMCC.OB said on Monday it would ask for an additional $1.5 billion from taxpayers due to losses stemming from the weak housing market.

Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

But you know what? The bailout, by the numbers, clearly did work. Not only did it forestall a worldwide financial meltdown, but a Fortune analysis shows that U.S. taxpayers are also coming out ahead on it — by at least $40 billion, and possibly by as much as $100 billion eventually. This is our count for the entire bailout, not just the 3 percent represented by the massively unpopular Troubled Assets Relief Program. Yes, that’s right — TARP is only 3 percent of the bailout, even though it gets 97 percent of the attention.

House Republicans say it is time to end a costly federal bailout of Fannie Mae and Freddie Mac that has already cost taxpayers $150 billion.

The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of their boards.

The U.S. Troubled Asset Relief Program, which risked $700 billion of government funds to bail out troubled banks and automakers, will cost taxpayers a mere $25 billion, according to an estimate released on Monday by the nonpartisan Congressional Budget Office.

American International Group Inc and the U.S. government agreed on a plan that would see the insurer repay taxpayers fully for bailing it out at the height of the financial crisis.

In its single biggest repayment of bailout loans so far, American International Group Inc. said Monday it is paying back nearly $4 billion in taxpayer aid with proceeds from a recent debt sale.