“Fannie Mae, the largest source of home-loan money in the U.S., said it will need to tap as much as $16 billion in emergency funds from the U.S. Treasury Department to stay afloat as deterioration in the housing market persists.
Fannie’s planned request, announced today, follows Freddie Mac, which said Jan. 23 that it will need as much as $35 billion more in federal aid. Unprecedented mortgage losses drove the net worth of both companies below zero last quarter, they said in separate securities filings.”
Fannie to Tap U.S. for as Much as $16 Billion in Aid [Bloomberg]
U.S. Existing Home Sales Rise on Record Price Slump [Bloomberg]

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Comments from “Plugged-In” Readers

  1. Posted by tipster

    Those two are zombie banks from here on out.

  2. Posted by Sb

    How much money will we give these “banks” before they get cut off? Each quarter they’ll come begging for another 10-20 bil. It’s the way banking works now.
    Anyone have any idea how long we’ll tolerate this idiocy?

  3. Posted by 143 DOM

    FRE and FNM are incompetent and should have been allowed to fail. Start with a clean slate instead of this agonizingly slow motion train wreck.

  4. Posted by ex SF-er

    Those two are zombie banks from here on out.
    They’ve been zombies for years. They just were better at hiding it through cooked financials initially.
    I for one am shocked, SHOCKED, that anything like this could have happened. I remember the joy that many people had when it was decided to raise Fannie/Freddie’s conforming limits to $700k+. what a brilliant idea! Even when their regulator fought it due to their dirty financials, but was overridden.
    oh well… at least Fannie/Freddie’s actions have saved the RE market as planned. what? they haven’t? why did we do that again?
    I wouldn’t jump too much on Fannie and Freddie though. Their bailouts pale in comparison to what AIG, Citi, BofA have gotten/will get.
    as credit cards and student loans and other types of mortgages get hit it wouldn’t be surprising for Wells and even JP Morgan Chase to start coming to the table too.
    Unfortunately, almost every major US national bank is a zombie bank, as well as several major regionals and many many local banks.
    luckily, we are in good company, since most major world banks are also zombie banks (Mitsubishi, UBS, Credit Suisse, DeutcheBank, Societe General, RBS, you get the picture.)
    we are slowly agonizingly going towards massive nationalization of the world banking system. a pity, really. we could have selectively nationalized with far less cost had we done it earlier.
    but then how could Thain get his Million Dollar Office, or Citibank buy their brand new $50M Private Jet, or worse yet how could Wall Street give out near record bonuses in their time of need?

  5. Posted by Mole Man

    Speeding up the train wreck makes it worse. The conforming limits clown act was before the bubble burst closed the curtain on the bubble circus.
    All this continues to increase the demand for RTC 2. That won’t fix everything, but the problems won’t seem so bad or open ended once some bad assets have been sold off.

  6. Posted by Scott

    Socketsite – Thank you for the edit of previous remarks from last night.

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