Fannie Mae Asks for $8.4B

Less than two years after receiving billions in government aid money, Fannie Mae is again turning to the taxpayer for help. This time, the mortgage finance company is asking for US$8.4 billion after losing more than US$13 billion in the first quarter of 2010. If approved, Fannie Mae and Freddie Mac together, will have received together, $145 billion with Fannie Mae’s portion set at $83.6 billion.

Fannie and Freddie are firmly entrenched in the US mortgage industry. They purchase mortgages from lenders and then repackage the debt and resell to investors. During the real estate boom prior to the recession however, Fannie and Freddie loosened their lending standards resulting in a major devaluation that left the two companies severely in debt.

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