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Ignoring the Elephant in the Bailout [Freddie and Fannie]
New York Times ^ | 10 May 2010 | Gretchen Morgenson

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 world’s 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 that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request.

But taxpayers should examine Freddie’s first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddie’s delinquent mortgages, the company’s 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 ...

TOPICS: Business/Economy; Government
We've noticed.
1 posted on 05/11/2010 5:07:10 PM PDT by Lorianne
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To: Lorianne

Spread the word
The Senate is voting no Cap and trade tomorrow 5-12-10
Tell your senator to vote no.

2 posted on 05/11/2010 5:09:29 PM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: Lorianne

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.

3 posted on 05/11/2010 5:57:41 PM PDT by therut
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To: therut
I will tell you why. Private investors, with good reason stopped buying mortgage backed securities years ago because of huge losses that they could not sustain. Freddie and Fannie are the only ones buying mortgages and even with a monopoly (duopoly) they still managed to lose billions. At least as a tax payer you have the comfort of knowing that you are subsidizing your own mortgage.
4 posted on 05/11/2010 6:38:34 PM PDT by Pamlico (Oppose 0bama at every opportunity)
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To: Pamlico
Why did Citi not want the interest? They think everyone is a deadbeat. Heck I would work 3 jobs if needed to keep my home. Of coarse I will not have to do that. I feel Citi is a whore for servicing my loan and Freddie is the pimp.
5 posted on 05/11/2010 6:50:10 PM PDT by therut
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To: therut
I think F&F are trying to improve their loan portfolios by encouraging banks to sell them good loans. If they do that often enough, with taxpayer money, they can claim that the percent of bad loans has gone down.

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.

6 posted on 05/11/2010 8:50:19 PM PDT by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
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