Monday, May 10, 2010

Fannie Mae seeks $8.4 billion from govt after loss

Fannie Mae at 3900 Wisconsin Avenue, NW in Was...

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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.

The U.S. Treasury took control of the two entities at the height of the financial crisis in 2008 as mortgage losses mounted. The two firms have now tapped more than $145 billion in assistance from Uncle Sam's unlimited credit line.

Housing analyst Rajiv Setia of Barclays Capital said Fannie Mae is likely to draw another $40 billion to $50 billion from the government.

The plan to put them into conservatorship was meant to be temporary, but more than a year and a half later, Treasury Secretary Timothy Geithner has only just begun the process of figuring out how to overhaul the U.S. housing finance system.

Fannie Mae seeks $8.4 billion from govt after loss

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