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The projected taxpayer cost to preserve the profitability of ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ is lower now that the GSEs are not expected to draw from Treasury to pay dividends and home prices are increasing, according to a ""report"":http://www.fhfa.gov/webfiles/24611/Projections102612.pdf from the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA).
[IMAGE]So far, the GSEs have drawn $187.5 billion from Treasury. When assessing potential Treasury draws under three different scenarios, FHFA projects Treasury draws will range from $191 billion to $209 billion at the end of 2015, or an additional $3 to $22 billion in support.
In October 2011, the ""cumulative projection was $220 billion to $311 billion"":http://dsnews.comarticles/officials-say-gse-bailout-will-cost-less-than-originally-estimated-2011-10-28 through 2014.
[COLUMN_BREAK]When subtracting dividend payments from the draws, the net amount is $67 billion to $138 billion.
According to FHFA, Fannie Mae would not require additional draws after 2012 in two of the three scenarios, while Freddie Mac would not require additional Treasury draws after 2012 in any of the three scenarios.
FHFA explained Fannie Mae's book of business is about 50 percent higher than Freddie Mac's, leaving Fannie Mae with higher cumulative draws.
In addition, under the best case scenario, the GSEs would pay additional dividends of $78 billion and $32 billion for the worst projected outcome.
According to the report, the projections are revised based on changes in outlook for ""house prices, interest rates, trends in borrower behavior and amendments to the terms of the PSPAs between the Treasury and each of the Enterprises.""
The changes to the PSPAs replaced 10 percent dividend payments to Treasury on senior preferred stock with a quarterly sweep of net worth, ending the need to draw from Treasury to pay dividends.
FHFA noted actual outcomes may be different than the agency's projections, and the projections are based on ""what if"" exercises and ""do not define the full range of possible outcomes.""
