- Feb 8, 2001
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You know, I almost did not post this story I am so sick of the use of taxpayer funds for bailouts.
This might be a required payout, but if the government continues to go forward with this largess, there should be an immediate cessation of all new major entitlement programs including ObamaCare and other pie in the sky wealth redistribution schemes.
Pay as you go, right? Where is the pay part? I would rather we don't go there at all so we don't have to pay for it!
Of course, Obama won and so we can't say that we didn't ask for it, right up our collective a***s.
Fannie Mae seeks $10.7 billion in new US aid after posting $15.2 billion second-quarter loss
* By Alan Zibel, AP Real Estate Writer
* Thursday August 6, 2009, 7:00 pm EDT
WASHINGTON (AP) -- Fannie Mae is seeking nearly $11 billion in new government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.
The mounting price tag for the rescue of Fannie and its goverment-sponsored sibling, Freddie Mac, is surpassed only by insurer American International Group Inc., which has received $182.5 billion in financial support from the government so far.
Fannie Mae's new request for $10.7 billion from the Treasury Department will bring the total for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results on Friday.
The two companies play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.4 trillion. That's about half of all U.S home mortgages.
With assets of that size, "it's hard for their problems to be small," said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions.
The mortgage finance company, seized by federal regulators last September, posted a second-quarter loss of $15.2 billion, or $2.67 per share, including $411 million in dividend payouts. That compares with a loss of $2.6 billion, or $2.54 per share, in the year-ago period.
"We are dependent on the continued support of Treasury in order to continue operating our business," Fannie Mae said in a Securities and Exchange Commission filing late Thursday.
The results were driven by $18.8 billion in credit losses due to declining housing market conditions, made worse by rising unemployment. Nearly 4 percent of the loans Fannie Mae owns or guarantees were delinquent as of June 30, up from 1.4 percent a year earlier.
The two companies lowered their standards for borrowers during the real estate boom and are reeling from the bust. High-risk loans, now defaulting at a record pace, have come back to haunt the companies. Worse still, the recession is causing formerly reliable homeowners with good credit to default.
The Obama administration is expected to unveil its plans for Fannie and Freddie early next year. Options being considered include keeping the companies private, winding down their operations, merging them into a federal agency or separating out their bad mortgage assets into a new company backed by the government.
Meanwhile, the head of the federal agency that regulates Fannie and Freddie Mac, James Lockhart, is stepping down at the end of the month. Edward DeMarco, chief operating officer of the Federal Housing Finance Agency, was named acting director on Thursday.
DeMarco, 49, has worked at the agency since October 2006. Before that, he worked at the Social Security Administration and the Treasury Department.
This might be a required payout, but if the government continues to go forward with this largess, there should be an immediate cessation of all new major entitlement programs including ObamaCare and other pie in the sky wealth redistribution schemes.
Pay as you go, right? Where is the pay part? I would rather we don't go there at all so we don't have to pay for it!
Of course, Obama won and so we can't say that we didn't ask for it, right up our collective a***s.
Fannie Mae seeks $10.7 billion in new US aid after posting $15.2 billion second-quarter loss
* By Alan Zibel, AP Real Estate Writer
* Thursday August 6, 2009, 7:00 pm EDT
WASHINGTON (AP) -- Fannie Mae is seeking nearly $11 billion in new government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.
The mounting price tag for the rescue of Fannie and its goverment-sponsored sibling, Freddie Mac, is surpassed only by insurer American International Group Inc., which has received $182.5 billion in financial support from the government so far.
Fannie Mae's new request for $10.7 billion from the Treasury Department will bring the total for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results on Friday.
The two companies play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.4 trillion. That's about half of all U.S home mortgages.
With assets of that size, "it's hard for their problems to be small," said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions.
The mortgage finance company, seized by federal regulators last September, posted a second-quarter loss of $15.2 billion, or $2.67 per share, including $411 million in dividend payouts. That compares with a loss of $2.6 billion, or $2.54 per share, in the year-ago period.
"We are dependent on the continued support of Treasury in order to continue operating our business," Fannie Mae said in a Securities and Exchange Commission filing late Thursday.
The results were driven by $18.8 billion in credit losses due to declining housing market conditions, made worse by rising unemployment. Nearly 4 percent of the loans Fannie Mae owns or guarantees were delinquent as of June 30, up from 1.4 percent a year earlier.
The two companies lowered their standards for borrowers during the real estate boom and are reeling from the bust. High-risk loans, now defaulting at a record pace, have come back to haunt the companies. Worse still, the recession is causing formerly reliable homeowners with good credit to default.
The Obama administration is expected to unveil its plans for Fannie and Freddie early next year. Options being considered include keeping the companies private, winding down their operations, merging them into a federal agency or separating out their bad mortgage assets into a new company backed by the government.
Meanwhile, the head of the federal agency that regulates Fannie and Freddie Mac, James Lockhart, is stepping down at the end of the month. Edward DeMarco, chief operating officer of the Federal Housing Finance Agency, was named acting director on Thursday.
DeMarco, 49, has worked at the agency since October 2006. Before that, he worked at the Social Security Administration and the Treasury Department.
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