Fannie and Freddie Narrow Losses – For Now

Fannie and Freddie Narrow Losses For Now

Mortgage giants Fannie Mae and Freddie Mac, wards of the state since 2008, continue to hemorrhage money as foreclosure and declining home values ravage the U.S. housing market.

According to their quarterly reports, Fannie and Freddie lost $2.1 billion and $1.7 billion in the fourth quarter, respectively. Fannie is seeking $2.6 billion in taxpayer money, slightly up from the $2.5 billion it needed from us last quarter, whileFreddie needs $500 million, up from the $100 million in aid it needed last quarter. Losses have narrowed somewhat from the fourth quarter of 2009, when Fannie and Freddie lost $16.3 and $7.8 billion.

All told, Fannie Mae lost $21.7 billion in 2010, down from losses of $74.4 billion in 2009. Freddie Mac lost $19.8 billion in 2010, down from $25.7 billion in 2009. I do not suspect that this trend will continue, aslosses will widen this year as the housing market continues its double dip and foreclosures increase.

Together the GSEs own or back about half of all U.S. mortgages, totaling around $5 trillion. All told, the government insured or backed in some way about 90 percent of mortgages originated last year. The Obama Administration has unveiled a plan that would slowly withdraw government support from the housing finance market, in the hopes that private investors will step in for the GSEs. If this plan comes to fruition, it will in all likelihood increase the cost of mortgage loans and make them harder to obtain. All told, the bailout of Fannie and Freddie is a total mess from which asmall number of entities are profiting.

Fannie and Freddie have thusfar received $133.7 billion from U.S. taxpayers. The government estimates that they will need about $260 billion before it is all said and done. Some experts believe they may need anywhere from $400 billion to $1 trillion.

Hey, what's a couple hundred billion between friends?

POST COMMENT

The Dodge Caliber SXT Hatchback of Calgary Dodge – its Spices and Space The Way To Decide On The Best Jiu Jitsu Gi For Each Day Use And Competitors How Do Your Pick The Correct Funded Sponsoring System? Catabolic and Anabolic States – Cutting Through All The BS Vampires, Do They Really Exist? Or Just Legend and Folklore Guys and Boobs A Guideline to Femur Fractures and its types Apple I pad and how to get it Free More Traffic Means More Visibility and More Credibility Oak Wilt and the Fungal Mat Connection Stock Commodity Trading Review-Stock Commodity Trading How to sell stories to newspapers and magazines Nintendo goes 3D, and Doesn't Disappoint