FANNIE MAE IN THE NEWS AGAIN...
Nov. 6 (Bloomberg) -- The U.S. Treasury rejected Fannie Mae’s request to sell $2.6 billion in low-income housing tax credits that the mortgage-finance company wasn’t likely to use.
“Every politician on Capitol Hill right now hates Goldman,” said Paul Miller, a bank analyst with FBR Capital Markets in Arlington, Virginia. “Politically, this would look really bad.”
Fannie Mae has posted $120.5 billion in net losses over the past nine quarters and requested $59.9 billion in Treasury aid.
A Goldman Sachs spokesman, Lucas van Praag, declined to comment, as did a Fannie Mae spokesman, Brian Faith.
The blocked sale illustrates the political and policy challenges facing the government as it looks to conserve both companies' capital while balancing larger policy and political goals.
The deal pitted two government agencies against each other over how best to run Fannie and its smaller rival, Freddie Mac. The government took over both mortgage-finance companies 14 months ago through a legal procedure known as conservatorship.
A Goldman Sachs spokesman declined comment. A representative of Berkshire Hathaway couldn't immediately be reached.
A Goldman Sachs spokesman declined to comment.
The sale of the tax credits would have helped stabilize Fannie Mae. The company on Thursday said bad mortgages and a federal foreclosure prevention program left it with a $18.9 billion loss, forcing it to tap a Treasury line of credit again to plug a hole in its net worth.
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