10
May
10

Fannie Mae asks for $8.4 billion in aid

NEWS
Fannie Mae asks for $8.4 billion in aid

Monday, May 10, 2010

••• U.S. mortgage finance company Fannie Mae has again asked taxpayers for more money after reporting a first-quarter loss of more than $13 billion.

The company, which was rescued by Washington in September 2008, said it needs an additional $8.4 billion from the government to help cover mounting losses.

Fannie Mae says it 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, a year ago.

The rescue of Fannie Mae and sister company Freddie Mac is turning out to be one of the most expensive aftereffects of the financial meltdown. The new request for aid will bring Fannie Mae’s total to $83.6 billion. The total bill for the duo will now be nearly $145 billion.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.

Fannie and Freddie play a vital role in the U.S. mortgage market by purchasing mortgages from lenders and selling them to 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.

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.

But Republicans argue the sweeping financial overhaul currently before Congress is incomplete without a plan for Fannie and Freddie. They propose transforming Fannie and Freddie into private companies with no government subsidies, or shutting them down completely.

Share

Advertisements

0 Responses to “Fannie Mae asks for $8.4 billion in aid”



  1. Leave a Comment

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Calendar

May 2010
M T W T F S S
« Apr   Jun »
 12
3456789
10111213141516
17181920212223
24252627282930
31  

Archives

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 3 other followers

© Copyright 2010 Dominic Stoughton. All Rights reserved.

Dominic Stoughton's Blog

%d bloggers like this: