Fannie Mae begging for another $15.3 billion bailout from government

barney-frank-joker-posterFannie Mae, the largest provider of U.S. residential mortgage funds, on Friday said it lost $16.3 billion in the fourth quarter and would need another $15.3 billion from the U.S. Treasury. according to Reuters.

The government-controlled entity said its loss came as rising defaults kept credit-related expenses elevated at $11.9 billion, though still lower than the third quarter level of $22.0 billion.

The loss was $15.2 billion before a $1.2 billion dividend payment on senior preferred stock owned by the U.S. Treasury and puts the total 2009 losses at $74.4 billion compared with $59.8 billion in 2008.

With the $15.3 billion request for funds from Treasury, Fannie has now asked for $76.2 billion from the Treasury’s unlimited credit line.

Fannie Mae has been struggling to contain losses sustained from its massive exposure to the U.S. housing market that is in the throes of its worst downturn since the 1930s.

Fearing that losses would harm Fannie Mae’s ability to support housing, the government placed the company into conservatorship in September 2008 and recently pledged unlimited financial backing.

Chief Executive Michael Williams said Fannie Mae’s “overriding” objective is to keep people in their homes amid the nation’s housing slump.

“We continue to work closely with our industry partners and the government to reach every borrower we can and to address rising foreclosure,” Williams said in a prepared statement.

Fannie Mae also said it recognized a $5.0 billion loss from the writedown of its investments in low-income tax credit partnerships.

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February 26, 2010 · Filed Under General Politics


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