Say It Isn’t So…..Fannie Mae And Freddie Mac Need More Money

Posted By on October 21, 2010

These two giant white elephants funded more than 62 percent of new mortgages in the first half of this year, according to Inside Mortgage Finance, a trade publication in Bethesda, Maryland.  It would seem that they some how managed to  loose money on every mortgage funded!

Fannie Mae and Freddie Mac the mortgage-finance companies operating under U.S. conservatorship, may need as much as $363 billion in Treasury Department aid or as little as $221 billion through 2013, the Federal Housing Finance Agency said. 

But previously the Congressional Budget Office calculated< last year> that Fannie Mae and Freddie Mac would need “only” $389 billion in federal subsidies through 2019.

Private  estimates are higher according to Sean Egan president of Egan- Jones Ratings Co. in Haverford, Pennsylvania.  He said a 20 percent loss on the companies’ loans and guarantees could lead to a $1 trillion taxpayer bailout.

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