Monday, January 26, 2009

Great News: Fannie Mae and Freddie Mac Looking For Another $50 Billion in Bailout Bucks

Two of the government-run operations that greased the skids for our economic woes (hello, Barney Frank!) are looking to dip into your pockets for at least another $50 billion.

We are so screwed.
Mortgage finance company Fannie Mae said Monday that it likely needs up to $16 billion from the government as conditions in the U.S. housing market continue to deteriorate.

Fannie Mae's disclosure that it expects an injection of $11 billion to $16 billion in taxpayer aid comes after sibling company Freddie Mac disclosed last week that it's likely to require as much as $35 billion in federal support on top of the $13.8 billion it received last year.

Fannie, which has yet to receive any government aid, said in a Securities and Exchange Commission filing that the actual amount needed "may differ materially from this estimate" because its fourth-quarter financial statements are still being prepared.
In other words, expect the tab to at least double.
Washington-based Fannie and McLean, Va.-based Freddie were seized by federal regulators last fall after facing mounting losses on loans they backed during the housing boom. An agreement with the Treasury Department allows the government to invest up to $100 billion in each company, though some analysts have speculated that the companies may need more than that.
And after that $100 billion gets blown, they'll be back for another couple hundred billion.


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