Bank of America Corp (BAC), Citigroup Inc (C): Encouraging Signs For America’s $3 Trillion Problem

In the grand tradition of “out of sight, out of mind,” Fannie gets far less attention now as compared to the likes of Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C). But if we looking back to 2006, Fannie’s balance sheet leverage — not including giant trusts that have since been consolidated — was above 20-to-1. B of A was at less than 11-to-1, while Citigroup Inc (NYSE:C) was levered at about 16-to-1.

It’s good to see Fannie’s fortunes turning, even if the provisions reversal makes it hard to count on profits that sizable going forward. It will be even better if future profits can chip away at the giant pile of money that’s been shoveled into the lender by the government.

But giant 2012 profit or not, the ol’ head-in-the-sand act when it comes to Fannie isn’t going to cut it. We need a real plan to address the future of Fannie.

The article Encouraging Signs for America’s $3 Trillion Problem originally appeared on Fool.com is written by Matt Koppenheffer.

Matt Koppenheffer owns shares of Bank of America. The Motley Fool owns shares of Bank of America and Citigroup.

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