Freddie Mac Bailed Out, Fannie Mae Bailout?; Federal Government Money to Provide Aid for Mortgage Companies for Life Support Again?
Posted on | August 8, 2010 | No Comments
Another big government bailout is on the way. This time Fannie Mae is looking for the federal handout. Tax payer money to bail out Fannie Mae is being organized right now, even as the national economy struggles and our nation’s debt expands. Fannie Mae is the Federal National Mortgage Association and is a federally chartered corporation that purchases mortgages. It began as a government subsidy entity in the 1930′s and today Fannie Mae, along with Freddie Mac, is a government sponsored enterprise responsible for buying and selling mortgages on the open market. Now Fannie Mae is in need of federal financial aid to stay viable. It is attempting to recover from losses from a majority of bad loans made from 2005 through 2008. Fannie Mae has requested $1.5 billion in taxpayer aid. Most recent reports stemming from Fannie Mae show that the company is in the red and that they are currently losing money. On Thursday, Fannie Mae said that it lost $3.13 billion in the April to June period. Fannie Mae now wishes to join Freddie Mac in receiving federal government bailouts.
Freddie Mac was rescued just two years ago when it received a taxpayer bailout. Experts believe that Fannie Mae is about to lose more as well. After certain government stimulus provisions run dry, the company may see more lose in the market. Will the federal government throw out another lifeline? The administration will be debating this topic and the possibility of more bailouts throughout August.
Author: Stephen Johnson