Fannie Mae asks Treasury for aid

Cannon_Fodder

http://news.bbc.co.uk/1/hi/business/8040423.stm

"US mortgage finance firm Fannie Mae has asked the Treasury for another $19bn (£12.6bn), as it announced a loss for the first three months of 2009.
It is the second time that Fannie Mae has requested government aid in recent months. It received $15.2bn in March.
The Treasury has made available funds of $200bn each to Fannie Mae and fellow mortgage giant Freddie Mac.
Fannie Mae reported a loss of $23.2bn, but it was smaller than the $25.2bn loss it made in the previous quarter."



A loss slowing down by $2bn is a green shoot, presumably.

$200Bn was not enough?! What are they, MPs or something?

1984ReturnsForReal_2

I think the $19bn will be funded from the $200bn made available & is not $19bn in addition to the $200bn.

Its just media reporting what was planned (at this stage anyway).

Not that $200bn isnt a great deal of money...

Heyman_2

What a mess....it still beggars belief how vulnerable all these organisations made themselves and the amount of money it's taking to bail them out.

bubblesmoney

actually they are bust already just like most of the other banks but are just being propped up by creative accounting.

but fannie even with creative accounting is still bust!!!!!!!!! and they are the worlds largest mortgage lenders along with freddy mac which is in an equally !!!!!! state. so much for greenshoots. they have some 5.3trillion plus on their books and are presently having negative valuations even as per their own accounts!

The first-quarter net loss widened to $23.2 billion, or $4.09 a share, pushing Fannie Mae’s net worth below zero for the second time.
....
“Future activities that our regulators, other U.S. government agencies or Congress may request or require us to take to support the mortgage market and help borrowers may contribute to further deterioration in our results of operations and financial condition,” Fannie Mae said in the filing.
...
A record 803,489 US properties received a default or auction notice or were seized in the first quarter, 24 percent more than a year earlier, as employers cut jobs and temporary programs to assist homeowners came to an end
......
“We expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from the Treasury,” Washington-based Fannie Mae said in a statement.
.............
Freddie Mac and Fannie Mae are the largest U.S. mortgage- finance companies, owning or guaranteeing about $5.3 trillion of the $12 trillion home-loan market.
..........
The fair value of Fannie Mae’s assets fell to negative $110.3 billion last quarter, compared with $105.2 billion in the fourth quarter.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aR_Lf2hl0TJU

penguine

My dad used to work as a mortgage banker in the US. He told me a few months ago that it's really baffling that Fannie and Freddie got into such a mess because they used to be very conservative. If you sold them a loan that didn't match their parameters then you had to buy it back from them!

His opinion is that this conservative approach went out the window with the "business knows best" attitude of Congress and the Bush Administration over the past decade. So Fannie and Freddie got pounded when the subprime mortgage securities began to tank. Plus it didn't help that they have had some horrible management and have engaged in shoddy, if not illegal bookkeeping (probably so that management could keep their bonuses coming in).

treliac

penguine wrote: »

My dad used to work as a mortgage banker in the US. He told me a few months ago that it's really baffling that Fannie and Freddie got into such a mess because they used to be very conservative. If you sold them a loan that didn't match their parameters then you had to buy it back from them!

Do you/your dad think that there will be a return to the conservative model, penguine?

We talk about needing to make fundamental changes within banking but how realistic is that, I wonder.

Zagu

penguine wrote: »

His opinion is that this conservative approach went out the window with the "business knows best" attitude of Congress and the Bush Administration over the past decade.

Not with Clinton and the Glass-Steagall Act?