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===Related legislation===
On May 8, 2013, Representatives [[Scott Garrett]] introduced the [[Budget and Accounting Transparency Act of 2014 (H.R. 1872; 113th Congress)]] into the [[United States House of Representatives]] during the [[113th United States Congress]]. The bill, if it were passed, would modify the budgetary treatment of federal credit programs, such as Fannie Mae and Freddie Mac.<ref name=1872cbo>{{cite web|title=H.R. 1872 - CBO|url=http://cbo.gov/sites/default/files/cbofiles/attachments/hr1872.pdf|publisher=United States Congress|access-date=28 March 2014}}</ref> The bill would require that the cost of direct loans or loan guarantees be recognized in the federal budget on a fair-value basis using guidelines set forth by the [[Financial Accounting Standards Board]].<ref name="1872cbo"/> The changes made by the bill would mean that Fannie Mae and Freddie Mac were counted on the budget instead of considered separately and would mean that the debt of those two programs would be included in the national debt.<ref name=Housepushbudgetreform>{{cite news|last=Kasperowicz|first=Pete|title=House to push budget reforms next week|url=
==Market consequences==
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==Financial condition of Fannie and Freddie prior to takeover==
Over 98% of Fannie's loans were paid on time in 2008.<ref>Ivry, Bob; Lynch, Sharon L. [https://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aMz0dl3IdwjU "Fannie Mae Unsold $5 Billion Homes Bring Peril to Shareholders"]. ''Bloomberg LP''. July 23, 2008.</ref> Both Fannie and Freddie had positive net worth as of the date of the takeover, meaning the value of their assets exceeded their liabilities. However, Fannie's total assets to capital (leverage ratio) was about 20:1, while Freddie's was about 70:1.<ref>[http://www.fanniemae.com/ir/pdf/earnings/2008/q22008.pdf "Fannie Q2 10Q Report"] {{webarchive|url=https://web.archive.org/web/20080909185126/http://www.fanniemae.com/ir/pdf/earnings/2008/q22008.pdf |date=September 9, 2008 }} (pdf). United States Securities and Exchange Commission. August 8, 2008.</ref><ref>[http://www.freddiemac.com/investors/er/pdf/financial-statements_080608.pdf "Freddie Mac Consolidated Statements of Income (Unaudited)"] {{Webarchive|url=https://web.archive.org/web/20080909185134/http://www.freddiemac.com/investors/er/pdf/financial-statements_080608.pdf |date=September 9, 2008 }}. Freddie Mac. August 6, 2008.</ref> These numbers increase significantly if one includes all the mortgage-backed assets they guarantee. These ratios are considerably higher than investment banks, which leverage around 30:1.<ref>{{cite web|url=http://www.housingwire.com/2008/09/22/the-death-of-wall-street/|title=The Death of Wall Street|date=September 22, 2008|work=HousingWire.com|access-date=January 23, 2017|archive-date=March 16, 2012|archive-url=https://web.archive.org/web/20120316111914/http://www.housingwire.com/2008/09/22/the-death-of-wall-street/|url-status=dead}}</ref><ref>{{cite web|url=http://www.aol.com/finance/|title=AOL - Finance News & Latest Business Headlines|last=AOL|work=AOL.com|access-date=January 23, 2017}}</ref>
However, there was concern{{According to whom|date=January 2017}} that the GSEs' liquidity was insufficient to handle growing delinquency rates, such that although viable in September 2008, the scale of loss in the future would be sufficient that insolvency would occur and that knowledge of this future failure would induce immediate or near-immediate failure due to buyers refusing to buy debt. Both GSEs roll over large amounts of debt on a quarterly basis, and failure to sell debt would lead to failure due to lack of liquidity. A slower form of failure would be the issuing of debt at high cost (to compensate buyers for risk), which would greatly diminish the earning power of both GSEs, rendering them unable to earn the money they would need to handle expected future losses. Both GSEs counted large amounts of deferred tax assets towards their regulatory capital, which were considered by some{{Who|date=January 2017}} to be of "low quality" and not truly available capital. The deferred tax assets would only have value if the companies were profitable and could use the assets to offset future taxes. Both companies had experienced significant losses and were likely to face more over the next year or longer.<ref>[https://www.bloomberg.com/apps/news?pid=20601087&sid=a3pTtizqxtcA&refer=home Kopecki, Dawn. "Fannie Mae, Freddie 'House of Cards' Prompts Takeover". ''Bloomberg LP''. September 6, 2008.]</ref>
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