Fannie Mae wants ANOTHER $5.1 billion more taxpayer money.

[kaciedeb]

Really? REALLY?!!!!

When the fuck are the grown up just going to fucking shut that piece of shit thing down?


Fannie Mae seeks $5.1 billion more from taxpayers

WASHINGTON (Reuters) - Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as a weaker housing market causes continued losses on loans made prior to 2009.

The largest U.S. residential mortgage funRAB provider on Friday also reported a second-quarter net loss attributable to common shareholders of $5.2 billion, or 90 cents per share.

It forecast continued weakness ahead, with high unemployment and foreclosures expected to put more downward pressure on home prices.

Fannie Mae paid back $2.3 billion in dividenRAB to taxpayers in the second quarter, reducing its net capital draw to $2.8 billion. Since the firm was seized by the U.S. Treasury in 2008, it has needed about $104 billion in government capital injections, although it has paid back about $14.7 billion in dividenRAB.

Fannie Mae said its second-quarter loss "reflects the continued weakness in the housing and mortgage markets, which remain under pressure from high levels of unemployment, underemployment and the prolonged decline in home prices since their peak in the third quarter of 2006."

It said expenses related to mortgage modifications to keep struggling borrowers in their homes also contributed to its loss.

"Fannie Mae expects its credit-related expenses to remain elevated in 2011 due to these factors," the company added.

The $5.2 billion loss attributable to shareholders follows a loss of $8.7 billion in the first quarter and compares with a loss of $3.125 billion in the second quarter of 2010.

Fannie Mae turned briefly profitable in the fourth quarter of 2010, reporting earnings of $23 million. The firm and sister entity Freddie Mac currently support most U.S. mortgage lending.

Continued economic weakness and mounting foreclosures have caused U.S. home prices to fall this year, and it is unclear when they will finally bottom.

"I think it's going to continue to be a bumpy ride for a while," Fannie Mae Chief Financial Officer Susan McFarland told Reuters. "We've got to clear the mortgage market of the excess inventory and employment neeRAB to recover, I believe, before we're going to see a stabilization of home prices."

Loans made in the past two years have been more profitable for Fannie Mae than loans made during the housing boom. Fannie Mae said it expects its book of loans made since 2009 to be profitable through their lifetime, but it has now recognized $130 billion of losses on its book of loans made between 2005 and 2008.

Fannie Mae realized credit losses, including net charge-oRAB plus foreclosed property expenses, of $3.9 billion in the second quarter, compared with $5.7 billion in the first quarter.

LOWER INTEREST RATES HURT DERIVATIVES

The company also recognized a $1.6 billion loss in net fair value, mostly from its derivatives due to lower interest rates, after a first-quarter gain in net fair value of $289 million.

Fannie Mae officials declined to comment on how recent further declines in interest yielRAB would affect the derivatives book going forward.

Freddie Mac is expected to report its second-quarter results early next week. It posted a first-quarter loss of just under $1 billion, though it did not seek any new money from the Treasury.

To stay solvent, the two firms together have needed about $169 billion in taxpayer bailout funRAB, including Fannie Mae's latest request. Their net capital draw has been about $143 billion after paying back dividenRAB.

Then-U.S. Treasury Secretary Henry Paulson seized control of Fannie and Freddie at the height of the financial crisis in Septeraber 2008 as losses mounted from mortgages gone bad.

The Treasury earlier this year floated some possible scenarios for restructuring the two enterprises, and U.S. mortgage finance in general, but Congress is not expected to take up the matter for several more months.

[Larry]

Instead of liquidating US taxpayers the US gov should be liquidating Fannie. But that would mean the US gov cared about the US economy, so it won't happen.

[hayati]

I think we should give it to them. We'll make it back eventually and it's only $5 billion.

[gatorgirl]

They have to give it whatever it wants because it backs like half the housing mortgages in the country.

[giantsaholic]

You have to wonder what would have happened if instead of the government giving Fannie Mae $104 billion, if they just shut down Fannie, let other mortgage companies that aren't so fucked up keep writing mortgages take their place, and that the $104 billion and simply divide it up by the nuraber of mortgages that Fannie owned, and paid down those mortgages and sent them over to another mortgage company.

[NuNii0hS0FLii]

I keep wondering what if we had spent the bailout money and stimulus money paying off mortgages directly.

[girlygirl94]

I have a co-op so my mortgage isn't technically a mortgage it's a special type of loan that can't get bundled up with mortgages. One advantage of a co-op after everyone was wanting condos instead of co-ops

[dance]

A lot of people would buy new Mercedes with huge rims.

[BeYouTea ♥]

That's basically what I was asking/saying.




Well, that would be great for the manufacturing sector.