Obama raised their debt limit to $400 Billion and it looks like both GSEs are going to use every dime. It also means the taxpayers are on the hook for every penny while Freddie and Fannie have no Inspector General to oversee where the money is going. The taxpayers continue to get screwed as Obama promises “no more bailouts”…except to Freddie and Fannie.
WASHINGTON (AP) — Mortgage giant Fannie Mae said Wednesday that it lost money in the fourth quarter and is asking the federal government for nearly $4.6 billion in aid to cover its deficit.
Washington, D.C.-based Fannie said it lost roughly $2.4 billion in the October-December quarter, stung by declining home prices. Revenue was about $4.5 billion.
The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator — the Federal Housing Finance Agency — has controlled their financial decisions.
The FHFA needed their own $43 billion dollar bailout so their financial decisions are about as bad as Fannie and Freddie’s.
Taxpayers have spent more than $150 billion to prop up Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could top $259 billion to support the companies through 2014 after subtracting dividend payments.
Despite these billions of dollars in loses, Freddie and Fannie gave millions in bonuses and it was approved by the Obama administration.
Fannie has received more than $116 billion so far from the Treasury Department, the most expensive bailout of a single company.
Fannie’s bailout money totaled roughly $16.4 billion in 2011 after accounting for dividend payments. That’s up from about $7.3 billion in 2010 but down from about $32.5 billion in 2009.
Fannie officials say losses have increased in recent quarters for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
This is Obama’s fault. See his failed HAMP for proof. Obama is forcing banks to lower interest rates, despite homeowners signing a contract to make their mortgage payments. This is what happens when government interferes and the taxpayers are getting screwed at twice the rate.
“While economic factors, such as falling home prices and high unemployment, produced strong headwinds for our business again in 2011, we continued to grow a very strong new book of business as we have since 2009,” said Michael J. Williams, Fannie’s president and CEO.
How can this be? Obama and DNC mouthpiece Debbie Wasserman Shultz continues to claim the economy has been turned around and millions upon millions of jobs have been created while unemployment continues to be above 8% for the 38th straight month.
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.
That’s $400 billion in guarantees.
Fannie’s $2.4 billion loss for the fourth quarter takes into account $2.6 billion in dividend payments to the government. That compares with a loss of $2.1 billion in the fourth quarter of 2010.
In November, Freddie requested $6 billion in extra aid — the largest request since April 2010 — after it reported losing $6 billion in the third quarter.
$6 billion in losses + $6 billion in bailouts = $12 billion stolen from the taxpayers.