After massive losses, Fannie asks Treasury for $10.7 billion
Published: August 6, 2009
Updated 7 months ago
Taxpayers gave troubled mortgage giant over $44 billion since April, over $101 billion in total
Troubled state-backed mortgage firm Fannie Mae took a massive 14.8-billion-dollar loss in the second quarter, and asked the US Treasury for another 10.7 billion dollars in aid, the company said Thursday.
Fannie Mae and its fellow state-backed lender Freddie Mac have already received hundreds of billions of dollars as part of a virtual government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
“Today’s results bring the company’s cumulative losses over the last two years to $101.6 billion and will bring its total draw on the Treasury to $44.9 billion since April,” noted Bloomberg.
The latest loss for Fannie Mae came on the heels of a 23.2 billion-dollar loss in the first quarter.
“Fannie Mae said it expects the quality of its assets to worsen further and to continue accumulating losses as it executes President Barack Obama’s efforts to modify or refinance loans for as many as nine million homeowners,” Bloomberg reporter Dawn Kopecki continued.
“Due to current trends in the housing and financial markets, we expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury,” the firm’s quarterly report said, according to The Wall Street Journal. “As a result, we are dependent on the continued support of Treasury in order to continue operating our business.”
The paper continued: “To deal with souring loans, the company said it reached workout deals on 41,000 mortgages during the quarter. Loan modifications made up 40% of the total. Fannie said it expects increased activity under the federal Making Home Affordable program as mortgage services gain experience with it. The company noted trial modifications jumped in July from the second quarter.”
“In one hopeful sign, Fannie Mae narrowed its quarterly loss to $14.8 billion, or $2.67 per diluted share, down from $23.2 billion, or $4.09 per share, in the previous quarter,” noted CNN. “The company lost $2.3 billion, or $2.54 per share, in the second quarter last year.”
“Credit losses from the housing crisis are still to blame for Fannie Mae’s dour results,” the television news network continued. “The company racked up $18.8 billion in credit-related expenses during the latest quarter. However, the company reduced its provision for credit losses to $18.2 billion, from $20.3 billion in the first quarter, because of a slowdown in the increase of estimated defaults and losses per default.”
By market’s close on Thursday, shares in Fannie Mae (NYSE: FNM) were trading at just 79 cents.
With AFP.
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Fuck Fannie! Let ‘er die and let’s wait for the next one to go down!
Fannie and Freddie ran for years as a government run enterprise under government regulations and control- and very successfully. And then the Reagan “revolution” and all things need to be deregulated and government is the enemy and private enterprise is always good and right. And Fannie and Freddie became privately owned and allowed to speculate in the Market etc. And they bought billions of the toxic bullshit that Wall Street was pawning off on suckers. And that’s why they are so screwed because they were made private and allowed to gamble instead of focusing on their charter to assist the lesser among us in achieving home ownership. But they weren’t alone in needing a bailout. were they? No in fact they are small potatoes compared to what we’ve lent the private financial sector. Thanks St. Ronnie and the GOP for undoing all the preventive New Deal programs that were America’s firewall against another Great Depression. I’ll never vote for a Republican as long as I live. They would truly cut off their noses to spite their own faces.
“And Fannie and Freddie became privately owned and allowed to speculate in the Market etc.”
Worse, when the big dogs of private banking started putting their friends into leadership of Freddie/Fannie, the private sector started pushing bad loans over to them, and Freddie and Fannie, under corrupted private ownership and lax oversight, colluded to keep putting the risk on the public while the private kept their books looking nice and pretty.
People don’t realize that we “dislike our government” because of who we’ve put in office.. there’s nothing inherently “wrong” with government, or it running things.. The reason government is (theoretically) better is because they answer to the public _directly_ via elections… private company owners are not.
Put people in charge of the government that value getting rich above the value of human lives, and you have what we do here today.. 10s of millions being abused and left to rot for no good reason, other than it makes a few guys really rich. If you put in people that cared about other people, we’d be solving problems, not ignoring them while the money flows in.
You know what I could do with $10.7 billion? Cure cancer. Wipe out HIV. Create a blood substitute. For $100 billion I could create a system of dealing with every kind of human parasite.
The entire annual budget of the NIH is $30 billion. WTF are we wasting our money on these dying corps for?
Must be nice to be able to get bailed out every time you take a loss.
Mom and pop businesses, the backbone of this nation started by the people who BUILT this nation, are failing on a daily basis and yet banks and lenders are getting TRILLIONS in bailout money like it’s candy on Halloween and they’re a bunch of trick-or-treaters.
Wake the FUCK up AMERICA. You are being SHAFTED on a daily basis by these banks and lenders. It’s BEYOND time for us to take our country back.
If the founders of this nation were alive today they would SHED BLOOD to retake what they had built so long ago.
you can’t take America back.. the ruling elite control the armies and the media.
The Founding Fathers would be called “domestic terrorists” today (like they were when they broke from Britain), and they would be swifted off to Gitmo and never heard from again. Part of why the government wasn’t ever supposed to have a standing army, and we have that right to bear arms. Not that our leaders kept up with the times or technology in the desire to protect our rights, they just did what was needed to increase profits (and the uneducated and unconcerned public helped them do it cause “profits” sounded good to them, too).
The whole lot of them: Ben Ber-fucking-skanky, Goldman Sachs, Summers, Geitner, AIG, Federal Reserve…. They’re a fucking blood sucking leech on the ass of all humanity… I pray, I beg, I implore, I beseech any higher powers that be to destroy them permanently!!!