According to Huffington Post:
Fannie Mae needs another $15 billion in federal assistance, bringing its total to more than $75 billion. And worse, the mortgage finance company warned its losses will continue this year.
The rescue of Fannie Mae and sister company Freddie Mac is turning out to be one of the most expensive aftereffects of the financial meltdown. The new request means the total bill for the duo will top $126 billion.
And the pain isn’t over. Fannie warned Friday that it will need even more money from the Treasury, as unemployment remains high and millions of Americans lose their homes through foreclosure.
Fannie Mae reported Friday that it lost $74.4 billion, or $13.11 a share, last year, including $2.5 billion in dividends paid to the government. That compares with a loss of $59.8 billion, or $24 a share, a year earlier.
Fannie Mae, which was seized by federal regulators in September 2008, has racked up losses totaling $136.8 billion over the past three year.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.
Earlier in the week, Freddie reported a loss of almost $26 billion for last year. The company didn’t request any more money, but expect to do so later this year.
Fannie and Freddie play a vital role in the mortgage market by purchasing mortgages from lenders and selling them to investors. Together the pair own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages.
“Through this prolonged stress in the housing market, we are helping homeowners across the country, supporting affordable housing, and providing financing to keep the residential markets functioning,” the company’s chief executive, Mike Williams, said in a statement.
The two companies, however, loosened their lending standards for borrowers during the real estate boom and are reeling from the consequences. At the end of last year, nearly 5.4 percent of Fannie Mae’s borrowers had missed at least one payment – dramatically higher than historic levels.
During the most recent quarter, Washington-based Fannie suffered $11.9 billion in credit losses and a $5 billion write-down for low income tax credit investments.
That led to a fourth-quarter loss of $16.3 billion, or $2.87 a share, including $1.2 billion in dividends paid to the Treasury Department. It compares with a loss of $25.2 billion, or $4.47 a share, in the year-ago period.
What a joke. These are the people who ran our economy into the ground. On those grounds alone we should not help them. Beyond that, though, why should the government help them? Why are they so special? Government bailouts and favors to certain private (or, in this case, formerly private) businesses and industries is exactly what’s wrong with our government. Let Fannie Mae fail, let our economy absorb the hit…and let us come back stronger than ever, as the weak businesses go under and the strong ones stay intact.
February 27th, 2010 at 11:29 am
Daily Presidential Tracking Poll
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll
February 27th, 2010 at 11:34 am
This is what will kill Romney in the end — he favors these types of bailouts. He’s a Hank Paulson Republican to the core.
February 27th, 2010 at 11:53 am
Flip,
What Romney favors is what makes sense. He didn’t turn around more than 150 companies by NOT knowing what makes sense. He also knew how to trim the fat or jettison parasitic business segments when necessary. You’ve been consistently wrong about Romney from Day One.
February 27th, 2010 at 12:10 pm
They’re government-sponsored entities (GSEs), and thus owned by the taxpayer. We citizens have to foot the bills for them, unless the US defaults on its debts and essentially declares bankruptcy.
It’s the same problem that afflicts Medicare, Medicaid, Social Security, and all the federal, state, and local public employee pensions: Until we declare bankruptcy, we’re on the hook.
Check out Jose Pinera, the man who privatized the Chilean entitlement programs, explaining how our net liabilities at current value amount to 100 TRILLION dollars.
February 27th, 2010 at 12:53 pm
There’s a great piece at The Corner that is dead on, basically Obama and his people are suicide bombers, they have already taken into account they are going to lose the elections but they calculate it is worth it to gain power over Americans through nationalizing everything and spending the country into oblivion, with the hopes it will not be undone once they are voted out. They will then rely on their ACORNS and newly created power structures to take care of them and keep them in the game.
I consider this a crisis.
February 27th, 2010 at 12:55 pm
Any ideas out there besides Glenn Beck? Not dissing Glenn Beck, that is. I’m sure there must be some Constitutional mechanism to deal with suicide politicians. What is it? Or does this have to be a John Galt thing….thinking…..brain storming….
February 27th, 2010 at 1:04 pm
The reason I’m convinced of this, was primarily due to the creepy little “Allah Akbar” moment Obama had at the very end of his Health Care convention. Remember? Where he says, we’re just going to have to shove this through procedurally, and if politicians perish, they perish. Was anyone else sitting there thinking, “What did he say?” Did he just threaten to ram Socialism down our throats no matta what? Indeed he did. And indeed he shall. The man has no other skills, he can only serve as being a body in the right place at the right time to throw the red switch on American free market systems. And like a good little soldier, he’s doing it before our very eyes.
Believe me, Obama, Pelosi, and Reid are at the strip club right now making their final preparations to self-destruct politically in order to take away your way of life, in the hopes that their Utopia and virgins await them. Unbelievable. Yet true.
February 27th, 2010 at 1:05 pm
#5… To me that’s the same problem as exists with term limits. I don’t know exactly how much of an incentive it is, but the fact that members of congress have to worry about reelection forces them behave at least a little bit. You remove that incentive and perhaps the corruption power-grabbing gets even worse. (On the other hand, maybe having a more frequent influx of new faces would cancel it out?)
I absolutely agree with what Andrew McCarthy was getting at in The Corner, though. As he mentioned, it’s the argument people like Mark Steyn have been making all along. Health care reform isn’t something we can try out and if it doesn’t work, scrap it and find something better. These policies will near impossible to get rid of and will represent a huge power shift towards ever bigger government. I believe the Democrats understand this… I’m not sure about some of our elected Republicans.
February 27th, 2010 at 1:09 pm
Yeah Hunter, I’m freaked. What do freedom loving Americans do? I’m thinking we have to be creative, and immediate. Recall? Petitions? Protests? Does anything work in a crisis like this? Or do I need to just sit down and calm myself, and …..hope for change.
February 27th, 2010 at 1:09 pm
Obama is a freakin’ radical. It’s all true. It has just now sunk in with me.
February 27th, 2010 at 1:12 pm
Oh yeah and good point about the term limits, that hadn’t occurred to me. Still, I’m thinking two terms max.
Back to the dilemma at hand! We don’t have much time! Everybody BRAINSTORM!!!! The red wire, or the black. The red or the 3..2….1
February 27th, 2010 at 1:18 pm
Look, the first thing is he has to be forced away from talking as if he’s a freedom loving American Patriot. He’s not. When he says this is for the people without insurance, blah blah blah, that can’t be accepted anymore. This is a powergrab.
The second thing is he has to be kept busy. Busy busy busy, I don’t think he is sophisticated enough to handle too many emergencies at once. He needs a trip to Chile, to check on those folks. He needs to go give a speech in Berlin. He needs to be kept busy, busy, busy.
We also need to find the weak link in Reid and Pelosi, and Obama. Reid still has some American sympathies in him, I think, Pelosi has completely sold out. Reid needs to be worked on, he has to start giving information and working for the American people on the sly. We need an undercover agent. Shoot, I’ve gotta go change a diaper. Someone pick up where i left off.
February 27th, 2010 at 1:26 pm
Yep, I think Reid is the weak link. He can be flipped. You saw how on edge he was at the summit. He still has a fragment of a conscience…he still identifies with America the Beautiful at some deep dark teeny little level. Now we need an operative. Unassuming, but beautiful…..charming yet lethal….she needs to work on him, tweaking his conscience, bringing him back to a rememberance of life liberty and the pursuit of happiness….we need to deny Obama the puppets that bring Congress around to do his bidding.
February 27th, 2010 at 1:46 pm
Liz,
I’ve tried twice to make much longer statements supporting your idea here, but in the interest of time, let me say: Keep up the advanced theoretical thinking!
February 27th, 2010 at 2:03 pm
Looks like AIG is also going back to the federal trough.
February 27th, 2010 at 3:32 pm
The problem we have now with Fannie/Freddie/AIG/etc is the same as with the War in Iraq: We’re already so deep into it we can’t walk away now. We can’t just walk away and let Fannie/Freddie fail now – we’re far too invested now.
The sadder thing – if there could be such a thing – is that we’ve learned nothing from these bailouts. Very little has changed since this whole mess began. In fact, it’s gotten worse. We bailed out the banks – a debatable act in and of itself – but now we’re gonna tax/punish them for accepting the bailout? Does Obama not think the consumers will have to pay for that? Banks are holding back credit more than ever, and the govt wants to tack on more strings and make it harder for consumers to dig themselves out of a grand-canyon-sized hole? We bailed out the car industry but gave more “cash for clunkers” money to foreign automakers than American ones. Business and industry – actual job creators – got shafted, while the unions – the source of much of the problem – won concessions and came out better than ever. And consumers are left holding the tab once again, meaning they have nothing to show for the trillion in spending. Any improvement in the economy to date comes entirely from one-time govt injection of currency – meaning the economy hasn’t improved one red cent without the taxpayers’ bailout cash and in fact has shrunk even more.
Meanwhile, Obama continues to survive on the superior ignorance of the American public. The latest: We can spend another $1 TRILLION on healthcare and LOWER!!! the deficit in the process. So how come my debt goes up when I spend money but the government’s goes down?
Where is Ross Perot and his pie charts when we need him!!
February 27th, 2010 at 8:55 pm
Dustin,
To criticize any business is anathema to economic conservativism according to some here.
February 27th, 2010 at 9:48 pm
Dustin,
If we are going to let Fannie and Freddie fail, then then government is effectively out of the mortgage business. Maybe it should be, but the blowback will be much higher interest rates on mortgages for borrowers. For decades, borrowers and investors benefited from the governments guarantee on conforming loans sent through Fannie, Freddie, and Ginnie.
February 28th, 2010 at 1:09 am
MWS,
I am all for the government getting out of the mortgage business. Whatever you may think of Rep. Ron Paul (R-TX), I just finished reading End The Fed, and he makes excellent points showing that it was government intervention that caused this mess. Continuing to encourage bad loans and investments makes the problem worse.
Of course, I feel terrible for the people who benefited in the short run and are getting the shaft now. Do not doubt that. However, we would be better off in the long run by staying away from government/business collusion like this.
Tommy Boy, this is where conservatism has messed up over the last few decades. This was made clear to me by a) the Chamber of Commerce’s supporting government intervention that was good for business and bad for the free market, and b) Timothy Carney’s piece in the Washington Examiner last year about why insurance companies should not be supported by conservatives. See it here: http://www.washingtonexaminer.com/opinion/columns/Down-with-the-health-insurers-8102155-53146107.html
Conservatism should be about free markets, not about big business. If the latter happens in the former, fine. Otherwise, no way.
February 28th, 2010 at 2:18 am
Paul burned by Tea Party blowback
http://dyn.politico.com/printstory.cfm?uuid=11C282DD-18FE-70B2-A8123E082335213A