Business NEWS

Goldman Sachs in talks to buy Fannie Mae tax credits

By Caroline Mittermair for CEOWORLD Magazine Updated:November 2, 2009

Goldman Sachs Group Inc (NYSE: GS) is in talks to buy millions of dollars of tax credits from government-controlled mortgage giant Fannie Mae (NYSE: FNM) , but the deal is running into opposition from the U.S. Treasury, The Wall Street Journal reported Monday.

A sale would bring much-needed financial support to Fannie Mae, but the administration is wary about approving a deal that would help Goldman reduce its tax bill, the report said. The Obama administration is currently reviewing the proposal, and may block it, while Goldman is hoping for approval this week, it added.

The Journal said precise details of the deal couldn’t be learned, but some on Wall Street think Goldman could buy $1 billion of the tax credits.

Goldman hopes to get approbation in the nearest days but the administration is cautious about approving a deal. The main apprehensions are caused by the fact that the deal would help the bank reduce its tax bill. Andrew Williams, Treasury spokesman, said: “Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers’ interest.” Both Goldman spokesman and spokespeople for Fannie and the Federal Housing Finance Agency (FHFA) had no comment.

Michael DuVally, spokesman at Goldman Sachs, said: “Fannie Mae is owned and controlled by the federal government, who wouldn’t confirm the company was in talks with Fannie about the credits. The only basis on which approval for any transaction would be given would be if it was clearly in the taxpayers’ best interest,” reported the newspaper.

Like this article! ‹ Ford reports $1 billion profit, cut almost 45% of workers since 2006 US Lender CIT Group goes bankrupt files for bankruptcy ›
Share this Post: Get It Delivered To Your Inbox