More money, Daddy, more money.
Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter.
Including the latest request, Fannie Mae will have received more than $84.6 billion from the government, and the firm said it saw no end in sight to federal assistance.
The announcement comes less than a week after smaller mortgage finance company Freddie Mac, said it would need $10.6 billion in government funds after losing $8 billion in the first quarter.
A refresher on the situation from WaPo in case you have forgotten (how on Earth could you?):
Under the terms of the government's 2008 emergency takeover of Fannie and Freddie, the Treasury must pump money into either firm whenever its worth, as measured by assets minus liabilities, goes into the red. Late last year, the Obama administration pledged unlimited backing.
There is really no way out so this is the expected outcome.
NYT's DealBook says it is a case of bad timing for OMG! Obama, who is trying to make it look like his administration is not the one who handed over $700 billion to the banks. GM is looking better but for some (really bizarre, surely) reason, Fannie and Freddie are still bleeding.
For some equally bizarre reason, it boils down to more partisan bitchfighting that does not at all solve the issue at hand. I don't give a fuck who actually did it, I just want to know who is going to fix it and how the fuck they propose that happens. Get on that, someone, please.
The government has already transfused $137.5 billion into Fannie Mae and its cousin, Freddie Mac, since seizing the two mortgage financing giants in August 2008. The money covers losses on mortgages that the companies bought or guaranteed during the housing boom, allowing them to continue buying new loans.
Democrats want to defer an overhaul of federal housing policy until next year, after the midterm elections. But Republicans have seized on the continuing losses to argue that a plan for the two companies should be a priority of the current legislation.
It is an argument that Democrats have struggled to deflect. “I think it’s a fair claim to make to say we haven’t done enough to address Fannie and Freddie,” Senator Mark Warner, Democrat of Virginia, said in an interview on CNBC Monday. “It is the big elephant in the room.”
Worse than the political bitchfighting, the Democrats are bowing down and admitting they fucked it all up. Again, no one is offering a solution and somehow this is a matter of "timing" for an administration that has done little but keep pumping free fucking money into these sideshows called GSEs.
Lest I be dubbed a total doom and gloomer, I feel compelled to point out that Fannie Mae reported a $11.5 billion Q1 loss this year compared to $23.2 billion last year. Fine. Sun is shining/the weather is sweet...
Meanwhile, the GSEs say it's the shitty quality of loans they are getting that's making them have to force mortgage lenders to buy their own loans back:
(American Banker via Climateer Investing):
Fannie said Monday in its first-quarter securities filing that it made servicers buy back or reimburse it for losses on $1.8 billion of loans, 64% more than a year earlier. It was the first time the government-sponsored enterprise disclosed the volume of its repurchase demands; previously Fannie only acknowledged that such demands had been on the rise since 2008 as delinquencies worsened.
Freddie Mac also has been sending more loans back to lenders: $1.3 billion in the first quarter, up 65% from a year earlier, according to its first-quarter filing last week.
In February Fannie announced a "loan-quality initiative" designed to reduce loan repurchase requests. If lenders do a better job on the front end of making sure the loans they deliver meet the GSE's guidelines, Fannie has said, it would not have to make lenders buy back so many defective mortgages after the fact.