Fannie Mae Reports Big Loss in First Quarter

Housing price declines plague mortgage loan corporation

Comment

By U.S. News Staff

Posted: May 6, 2008

Life just isn't getting any easier for mortgage loan corporation Fannie Mae. The housing bubble exploded in its face, and now the government-sponsored enterprise is reporting losses of $2.2 billion in the first quarter. To bolster its balance sheet, the company said it is planning to cut its dividend and raise $6 billion in new capital. As for the housing market, the company said it expects "severe weakness" throughout the rest of this year.

Comment

big loss

More importantly, Fannie also announced REDUCED dividends for their shareholders. Nice, we're on the hook for a virtually insolvent institution and shareholders are still getting dividends?
So when Fannie and Freddie need to raise capital (and is there anyone who thinks they won't?), taxpayers are forced to buy as much stock as they want to sell? Nice! Thanks Paulson for screwing us over.
Even bigger news is that Fannie Mae is no longer accepting Alt-A loans.
That's gotta seriously impact the banks who were still planning on selling these to FNM to get out of trouble.
FNM also is ramping up their fraud checks to force banks to take back loans that have false documentation (i.e. most Alt-A loans).
Angelo made a fundamental mistake in America, he made too much money. The Feds are going send him to the big house no matter what. He will be the poster boy for thie entire RE debacle and the Feds will be relentless. It is not that he committed insider trading, he simply made too much money and now he will pay.

June of AL @ Sep 13, 2008 04:30:14 AM

Add Your Thoughts Title Comment 3000 characters left

About You Name Email State