8/10/2009

"Fannie Mae seeks $10.7 billion in new US aid after posting $15.2 billion second-quarter loss"

The problems with Freddie and Fannie continue. It doesn't seem like they learned anything about using these government agencies to subsidize bad mortgages. From the AP:

WASHINGTON (AP) -- Fannie Mae plans to tap $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 government has pledged up to $400 billion in aid for the two companies, which play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. They have been under government control since last September, when their near-collapse helped set off the financial crisis.

Together, Washington-based Fannie and McLean, Va.-based Freddie own or guarantee almost 31 million home loans worth about $5.4 trillion. That's about half of all U.S home mortgages. . . . .

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2 Comments:

Blogger 1 said...

I guess the party of the Seditious & Sleazy didn't learn from their previous embarrassing episode...

8/10/2009 6:30 AM  
Blogger Braxton Hicks said...

Just great. Throw good money after bad!
When will the citizenry come to understand that the Federal Government should stay out of anything that smells like business. The fact is that when an agency is not concerned with making a profit and knows that there is a great amount of money that can be tapped regardless of performance, you can bet that that entity will not be efficient.

8/10/2009 8:07 AM  

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