Fannie Mae seeks $19B in US aid after 1Q loss, WHEN DOES IT END!!!

Discussion in 'Wall St. News' started by S2007S, May 8, 2009.

  1. S2007S


    Please tell me when the bailouts end....

    Fannie Mae seeks $19B in US aid after 1Q loss
    Fannie Mae seeks $19 billion in government aid after posting $23.2 billion 1st-quarter loss

    * Alan Zibel, AP Real Estate Writer
    * On Friday May 8, 2009, 11:18 am

    WASHINGTON (AP) -- Fannie Mae issued a grave warning about its future on Friday, saying it needs $19 billion in additional government aid as job losses grow and risky loans made during the housing boom go bad at a disquieting pace.

    The mortgage finance company, which already got a $15 billion government bailout in March, warned it may need even more money and won't be profitable for the foreseeable future.

    In a regulatory filing the company said "there is significant uncertainty as to our long-term financial sustainability." Even more government aid, it added, "may not be sufficient to keep us in a solvent condition."

    Fannie Mae posted a quarterly loss of $23.2 billion, or $4.09 per share. That compares with a loss of $2.5 billion, or $2.57 a share, in the year-ago period.

    The government, which seized control of Fannie Mae and its sibling Freddie Mac last September, has already spent about $60 billion to prop up the two companies. Fannie Mae's request Friday brings the total to $79 billion.

    The Obama administration's estimates the taxpayer bill for Fannie and Freddie will hit $147 billion out of a potential $400 billion by the end of September 2010.

    Fannie Mae and Freddie Mac 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 $5.5 trillion. That's about half of all U.S home mortgages.

    The two companies lowered their standards for borrowers during the real estate boom and are reeling from the bust. High-risk loans in California, Nevada, Arizona and Florida defaulting at a record pace have come back to haunt the companies. Worse still, the recession the housing crisis caused is causing reliable homeowners with good credit to default.

    Even loans to low-risk borrowers have "begun to experience increases in delinquency and default rates as a result of the sharp rise in unemployment, the continued decline in home prices" and the long economic downturn, the company said.

    In addition, Fannie said, the company is able to recoup less money through foreclosure sales -- Fannie owns 62,000 foreclosed properties -- because of the sharp drop in home prices. And Fannie expects home prices to decline another 4 to 17 percent.
  2. Another SCARY Post!!

    Everyone run for cover!!
  3. only 19b.. could have been 90b
  4. :D
  5. Yet another "cut and paste" post from the resident ET clown that doesn't TRADE for a living and gets "paid" by the post.

    When will this crap on ET end???

    When will ET start seeing some higher quality posts by people that actually put their risk capital on the line?
  6. Green Shoots!

    Doesn't our government OWN this company too? Or was this our presidents dry run in how to run a company for the first time?
  7. Peter Schiff said the bailout of F&F will result in 5000$ gold.

    Fingers crossed.:)
  8. How do you Ignore again here?
  9. $5000. Yeah, right.
  10. Do you ever add any value as opposed to your one-liner douchsheesh comments. I haven't seen one yet. Go do some bowl cuts!
    #10     May 8, 2009