In the years since the federal government modified its conservatorship agreement with Fannie Mae and Freddie Mac to sweep all the profits from the government-sponsored enterprises into the government’s coffers, many observers, including those with a serious financial interest, have questioned whether the so-called “Third Amendment sweep” was even necessary.
At the time, the government claimed that the GSEs were on the brink of collapse, and amended the terms of the GSEs’ conservatorship to ensure that the government had enough money to bail them out again if necessary.
