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Fannie Mae seeks $8.4B in aid after 1Q loss

Discussion in 'Free Speech Alley' started by DJM136, May 10, 2010.

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DJM136 fubar 24/7

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Gotta love govt. management!

WASHINGTON – Fannie Mae has again asked taxpayers for more money — this time $8.4 billion — after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion — and the final tally could be much higher.
The rescue of Fannie and Freddie is turning out to be one of the most expensive aftereffects of the financial meltdown, and Fannie Mae's first-quarter financial report on Monday made clear that there is no end in sight.
"The losses are not going to stop" soon, said Anthony Sanders, a finance professor at George Mason University, who warns that the housing market is likely to turn sharply downward again later this year.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie, lifting an earlier cap of $400 billion. And with the housing market still on shaky ground, Obama administration officials say it is still too early to draft any proposals to reform the two companies or the broader housing finance system.
Republicans, on the other hand, argue the sweeping financial overhaul currently before Congress is incomplete without a plan for Fannie and Freddie. They propose amending the legislation to transform Fannie and Freddie into private companies with no government subsidies, or shut them down completely.
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Fannie and Freddie operate "in a manner entirely different than they had been during the crisis period, precisely because Democrats acted — in collaboration with the Bush administration," Rep. Barney Frank, D-Mass., wrote last week in a memo to White House chief of staff Rahm Emanuel. Their losses "occurred before we took the first step towards reforming them ... nothing we could do today will diminish those losses."
Created by Congress, Fannie and Freddie buy mortgages from lenders and package them into bonds that are resold to global investors. Together the pair own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.
The two companies, however, loosened their lending standards for borrowers during the real estate boom and are reeling from the consequences. As the housing bubble burst, they were unable to raise enough money to stay afloat, and the government effectively nationalized them.
Since then, Uncle Sam's share of the mortgage business has kept getting bigger. Government institutions — mainly Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veterans Administration — backed nearly 97 percent of home loans in the first quarter of 2010, according to trade publication Inside Mortgage Finance.
But because the number of bad loans made during the boom continue to rise, Fannie Mae lost $13.1 billion, or $2.29 per share, in the January-March period. That takes into account $1.5 billion in dividends paid to the Treasury Department. It compares with a loss of $23.2 billion, or $4.09 a share, in the year-ago period.
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Fannie Mae seeks $8.4B in aid after 1Q loss - Yahoo! News

DJM136, May 10, 2010

#1
Rex_B Geaux Time

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Yay let's prop up more failing businesses!

Rex_B, May 10, 2010

#2
LaSalleAve when in doubt, mumble

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Hell NAW!!! let them bitches sink.

LaSalleAve, May 10, 2010

#3
PURPLE TIGER HOPE is not a strategy!

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PURPLE TIGER, May 10, 2010

#4
Rex_B Geaux Time

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LaSalleAve said: ↑

Hell NAW!!! let them bitches sink.
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I wish. Most people supported the bailouts.

Rex_B, May 10, 2010

#5
watson1880 Founding Member

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Throwing more good money after bad.

watson1880, May 10, 2010

#6
LaSalleAve when in doubt, mumble

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Most people in Washington Rex. I'm pretty damned liberal, and i say those bastards choke on bankruptcy.

LaSalleAve, May 10, 2010

#7
Swerved It appears my hypocrisy knows no bounds.

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LaSalleAve said: ↑

Hell NAW!!! let them bitches sink.
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My thoughts exactly.. :thumb:

Swerved, May 11, 2010

#8
gumborue Throwin Ched

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"Government institutions — mainly Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veterans Administration — backed nearly 97 percent of home loans in the first quarter of 2010,"

there is no way i believe this, so i question the entire article.

gumborue, May 11, 2010

#9
red55 curmudgeon Staff Member

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gumborue said: ↑

there is no way i believe this, so i question the entire article.
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Based on what?

red55, May 11, 2010

#10

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