Fannie Mae, the federally controlled mortgage finance giant, said Thursday it lost $19 billion in the third quarter and had submitted a request to the Treasury Department for $15 billion in more aid to stay afloat.Meanwhile, Freddie Mac doesn't need another bailout yet but it will:
District-based Fannie Mae and its McLean sibling, Freddie Mac, were seized in early September 2008 by the federal government. Since then, Fannie Mae has lost $111 billion. The $15 billion in aid it has requested comes on top of $45 billion it already received. Freddie Mac has received $51 billion in aid.
In total, the seizure of Fannie Mae and Freddie Mac has cost taxpayers $121 billion, among the costliest of the government's interventions to stabilize the financial markets.
Fannie Mae said its losses and its need for additional government aid are both likely to continue. And it said activities it was undertaking at the behest of the Treasury Department, such as modifying mortgages to help homeowners avoid foreclosure, were magnifying its losses. ...
In its earnings statement, Fannie Mae said its assistance to struggling homeowners "could adversely affect our economic returns, possibly significantly."
Freddie Mac said it didn't need any additional federal aid for the second straight quarter as it reported a loss of $6.3 billion for the third quarter on Friday.The government really didn't have much choice but to take control of Fannie and Freddie when they were teetering on collapse. However, government didn't have to keep these failed companies operational. The loses they will endure for continuing to lend during a declining housing bubble can be justly blamed on the politicians. The government should simply shut down Fannie Mae, Freddie Mac, and AIG. There's no good reason to keep these failed companies in business.
But the company said it expected to ask for more handouts from the U.S. Treasury in the future as rising unemployment and falling home prices continue to drive higher credit-related losses for both Freddie and its larger rival, Fannie Mae.
To put the costs in perspective, $121 billion in losses divided by 105 million American households means that these two companies have cost your household roughly $1,150.