In early May, the mortgage giant Fannie Mae announced another quarterly loss. That makes 11 consecutive quarters showing no gains. For the most recent quarter, Fannie Mae posted a loss of $11.5 billion. To add insult to the injury they asked for more taxpayer money. This time they are requesting an additional $8.4 billion in taxpayer assistance. A loss of $11.5 billion and the nerve to request another $8.4 billion shows just how much of a money pit this government turned mortgage investor is.
Fannie Mae is not alone in constantly wasting away taxpayer money; its twin Freddie Mac recently requested an additional $10.6 billion in taxpayer assistance, when these taxpayer assistance checks clear the Treasury, Fannie Mae and Freddie Mac will have used up $145 billion in taxpayer assistance.
There is one thing that you can guarantee and that is that Fannie and Freddie will continue to need taxpayer assistance. They once had a cap to the amount of taxpayer funds that they would have access to. Obviously that cap no longer exists. Fannie and Freddie are now being used by the government to pump money into the housing market. These two companies are serving as major source of liquidity in the housing market, no longer expected to make money.
Fannie Mae and Freddie Mac have continued to boost their efforts to modify home loans for distressed borrowers. They have actually doubled the number of loan modifications for the last quarter. These efforts are being pursued by the companies to support Obama’s anti-foreclosure program. Regardless of the fact that most of the loans that Fannie Mae modified in the first three quarters of 2009 had gone delinquent again within six months, the company is still trying to increase its efforts to modify more home loans.
More failed loan modifications and increasing losses across the board are going to end up costing the American taxpayers hundreds of billions of dollars in the months and years to come. This is evident by the fact that the companies and their directors, “are not obliged to consider the interests of the company” unless they are instructed to do so by the government.
The original federal takeover of Fannie Mae and Freddie Mac refers to the placing into conservatorship of government sponsored enterprises Fannie Mae and Freddie Mac by the U.S. Treasury in September 2008. It was one financial event among many in the ongoing subprime mortgage crisis.
On September 7, 2008, the director of the Federal Housing Finance Agency, James B. Lockhart III, announced his decision to place two Government sponsored enterprises, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), into conservatorship run by the Federal Housing Finance Agency.
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Not entirely related but isnt the same people who got goverment bailouts who are now telling the goverments that they must cut the budget deficits, beggars belief. As for this story like similar ones around the world its going to run and run