Skip to comments.Ignoring the Elephant in the Bailout [Freddie and Fannie]
Posted on 05/11/2010 5:07:10 PM PDT by Lorianne
If you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial worlds biggest wards of the state.
Freddie already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position.
The news caused nary a ripple in the placid Washington scene. Perhaps thats because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents dont notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddies latest request.
But taxpayers should examine Freddies first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddies delinquent mortgages, the companys sales of foreclosed properties and losses on those sales, the results provide a telling snapshot of the current state of the housing market.
(Excerpt) Read more at dealbook.blogs.nytimes.com ...
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I refinanced by mortage last month for 4.25% with Citimortage which had my previous loan. Now my loan is owned by Freddie and Citi is the one ONLY servicing my loan. I am not happy. I do not know why the .gov wanted my loan. They are in bed together.
In addition, Citi gets a cash multiplier by selling the loan. For every $100 cash they have, they get to loan $1000, or some such.
This was innocuously called "monetizing the debt" when the Fed did it for Europe a couple of days ago.