Fannie Mae seeks $8.5 billion from taxpayers

WASHINGTON Fri May 6, 2011 5:50pm EDT

WASHINGTON (Reuters) - Mortgage finance giant Fannie Mae (FNMA.OB) on Friday said it would ask for an additional $8.5 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

The largest U.S. residential mortgage funds provider reported a net loss attributable to common shareholders of $8.7 billion, or $1.52 per diluted share, in the first quarter.

Including the latest request, the firm has taken about $100 billion from the U.S. government since it was seized in 2008, though it has also paid about $12.4 billion to taxpayers in interest.

Loans made in the past two years have been more profitable than loans made during the housing boom in preceding years.

"As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company's overall single-family guaranty book of business," said Michael Williams, the firm's president and chief executive officer.

Sibling firm Freddie Mac (FMCC.OB) said on Wednesday it lost just under a billion dollars in the first three months of the year, though the second-largest provider of mortgage funds did not request any new money from the government.

The two firms together have asked for about $164 billion, though their net payments have been reduced to about $140 billion as a result of the interest payments, including the latest request.

Then-U.S. Treasury Secretary Henry Paulson took control of Freddie Mac and Fannie Mae at the height of the financial crisis in September 2008 as losses mounted from mortgages gone bad.

The plan to put them into conservatorship was meant to be temporary, although it is likely to be years before a long-term replacement structure takes shape.

The two firms and the Federal Housing Administration back close to nine of 10 new home loans after private mortgage funding dried up in the wake of the financial crisis.

(Reporting by Corbett B. Daly; Editing by Diane Craft and Dan Grebler)

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Comments (5)
Dud3 wrote:
Hell no. They are part of the reason for our current predicament. They do not supply any high paying jobs that also help boost the economy and we are currently suffering from the shady Wall street investors that helped destroy our economy.

May 06, 2011 7:19pm EDT  --  Report as abuse
Bank of America foreclosed Nov 2010 on my home which had a conventional loan. The loan balance was 194K . The property went to auction March 2011. Fannie Mae purchased the property and paid B of A 204K. This seems quite unusual since I had a conventional loan with no PMI (mortgage insurance)
Another odd thing was that Fannie Mae had the property taxes reassessed March 2011 to 127K. (The actual value of the property)
Since Fannie Mae just purchased the property for 204K, shouldn’t the assessed value be 204K?
What happened to the difference of 77K?
Well it seems the government has made a back door deal to bail out the top 5 major banks, while all the smaller ones are floundering and being closed by the FDIC.

May 06, 2011 7:57pm EDT  --  Report as abuse
inverse137 wrote:
The f’ing banks and the criminals at Goldman Suchs should be paying for this mess. Not taxpayers.

May 06, 2011 8:46pm EDT  --  Report as abuse
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