Fannie Mae and Freddie Mac both suffered from what’s likely to be a one-time event that resulted in a hit on their earnings for the fourth quarter thanks to the late 2017 Tax Cuts and Jobs Act that impacted their deferred tax assets.
The DTA hit Fannie took and the resulting net loss was fully expected and likely won’t cause an uproar on Capitol Hill. However, one lobbyist quipped: "Ah, the first taxpayer bailout of a large financial institution since the Great Recession."
Under this arrangement, the FHLBanks would be “jointly and severally liable” for the obligations of any single-family guarantor formed under the new system…
As National Association of Realtors Vice President Joe Ventrone put it: “It’s an unintended consequence of the tax bill rather than falling into the bailout narrative.”
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