Fannie Mae Posts $8.7 Billion Loss, Requests More Fed Aid

WASHINGTON -- Mortgage buyer Fannie Mae reported a loss of $8.7 billion for the January-March quarter, and asked for an additional $8.5 billion in federal aid.

The new request is more than three times the $2.6 billion in government aid it sought in the final three months of last year.

The loss was caused by declining home prices around the country, Fannie Mae said. It said prices declined on average 1.8 percent, leading more homeowners to default on loans that the mortgage giant had guaranteed.

The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. It estimates the bailouts will cost taxpayers about $259 billion.

Fannie Mae's January-March loss attributable to common shareholders works out to $1.52 per share. It takes into account $2.2 billion in dividend payments to the government. That compares with a loss of $13.1 billion, or $2.29 per share, in the same period last year.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default and sell them to investors around the world.

When property values drop, homeowners default – either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

The losses incurred in the first three months of the year are related to loans that were extended before 2009, Fannie Mae said. The company expects to make money on home loans that it acquired since January 2010.

Fannie Mae, based in Washington, and Freddie Mac, based in McLean, Va., own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.

The government has spent roughly $154 billion so far bailing out Fannie and Freddie.

Comments

[Marionette]

06:51 PM on 05/09/2011

NO! no more money... just, no... it's like a having a junky in the family...

[OSI MODEL]

03:58 PM on 05/09/2011

Well maybe Barney is going to be buying SQUARE meals and needs more $$$

[rocknrollinhoneybadger]

08:25 AM on 05/09/2011

Bawwwwny Frank's gift. It just keeps on giving eh?

[jokerdanny]

10:25 AM on 05/09/2011

just can't stop lying can ya

[Lemmy]

12:35 PM on 05/09/2011

Yep - the genesis of the finaical crisis lies here and yet no parading of Fannie Mae officials before Congress. they all got away scott-free . . . with millions on bonuses. And Bawny said there was no crithith!

[greyK]

08:00 AM on 05/09/2011

constantly going broke yet had 6 officers making over $500k and still wants US Taxpayers to help them. I'm with President Obama; it's broken beyond repair. Let's break it up and sell it off and get our money back.

[AmosKnows]

03:48 AM on 05/09/2011

It's a ponzi scheme so unless they want to fess up there's nothing to do but raise the debt ceiling. increase the deficit, and continue to print money.

[GloriaY]

01:13 AM on 05/09/2011

This has got to be a joke. They could not be seriously requesting more taxpayer bailout, i e corporate welfare. And exactly who had the nerve to make that request.

[jojobinx]

12:26 AM on 05/09/2011

I would not give them a plugged nickel.

[AmosKnows]

03:50 AM on 05/09/2011

"I would not give them a plugged nickel."

How do we get you in a position to make the call? Oh I know, we can have one of the two so-called political parties buy you at auction and then,,,wait that won't work you'll just do what all the bought criminals do - screw the people.

[Realtors Are Liars]

11:26 PM on 05/08/2011

Phony, Fraudie and HUD need to be dismantled and never resurrected.

[ms.understood]

09:41 PM on 05/08/2011

you mean fannie mae isn't dismantled? seriously, we need to vote out everyone and get people who are serious about solving problems and running a government entity!

[Conscientious Objector 2]

07:22 PM on 05/08/2011

and the entire fannie / freddie debacle is being kept off budget by the most transparent administration EVAAAAAH ! Imagine the deficit numbers if these losses are included. yippee.

[greyK]

08:05 AM on 05/09/2011

the debt was included which is another reason it skyrocketed and GOP blamed this administration once the housing debt, 2 wars, Pharma deal and tax cuts were put on the books.

[Conscientious Objector 2]

12:40 PM on 05/09/2011

No it was not. When the US decided to put Fannie and Freddie under US conservatorship and collapse them into the federal government their results, losses, had to be consolidated in the US results and budgets and they were not.

[greyK]

01:25 AM on 05/11/2011

hey moderators. I LOVE how you intentionally misrepresented my comment on Google. I didn't write what you posted on Google and I would like for you to remove that erroneous information that totally misrepresented this comment!!

integrity is important, misrepreseting ppl's post on this website is rather sleezy don't you think?

[CashCrop101]

11:08 AM on 05/08/2011

The strongest political allies of FannieMae in washington where all democrats.

Hell even McCain wanted to reform Fannie in 05, 06, 07 ,08.

[joni brit]

09:36 AM on 05/08/2011

somehow my heart does not bleed for FannieMae. Why is it that on so many of these bs modifications, the fannie mae number is not a fannie mae number at all?? .

[wa0cal]

09:35 AM on 05/08/2011

How many times does Fannie Mae need to be bailed out ? They must have poor management who get paid a hell of a lot more than they are worth.

[Lemmy]

12:39 PM on 05/09/2011

So true. Franklin Raines, Jamie Gorelick, Bawny Frank, Chris Dodd . . . connect the dots.

[DoUReally]

09:25 AM on 05/08/2011

Time to say "NO".

The fools in Washington continue to borrow trillions from the banks (FED) at with debt interest and then turn around and give the money to the same banks that are caused this crisis with out of control fractional reserve lending. No wonder the debt clock is spinning faster and faster...

[Janine547]

08:45 AM on 05/08/2011

This is exactly what is happening with the public employee unions. Their pension system is invested in mutual funds and stocks and when the market takes a dive, oh well, the retirements for the pensioners are guaranteed and the taxpayer is on the hook to pay it forever. This is why we need public employee pension reform to make it more of a 401k type so that the employees are responsible for their own retirement. Common sense dictates this.
Every single private company has reduced employees, frozen pay, cut benefits due to the economy. Why do public employees feel they don't need to share in the pain? If public employees are untouchable then there needs to be a new system installed, like what Reagan did to the air traffic controllers.
Public employees always get hefty raises and benefits when there are good times, they need to share the pain as well in bad times.

[triumph650]

09:35 AM on 05/08/2011

Wow. The public employees you know must live charmed lives. The ones I know get paid peanuts for jobs that are essential to our society and economy.

[greyK]

08:08 AM on 05/09/2011

accept everything you said is untrue. you had to live under a rock over the winter to see the union busting and unions giving more and more benefits to make up the nonexistent deficit claimed by GOP Governors. the end result was union employees pay flatened even more.

the truth is out there. stop taking Faux News lies and Google it.

[sandiegoconservative]

12:59 AM on 05/10/2011

Then tell him where he is wrong.

SEIU pensions are guaranteed just like he said. So are about a dozen other unions I can think of.