Fannie Mae asks Uncle Sam for $4.6 billion more
The mortgage giant reported a net loss of $2.4 billion in the fourth quarter of 2011 after it got slammed by falling home prices. To offset the deficit that helped cause, its regulator, the Federal Housing Finance Agency, plans to submit a request to the Treasury for $4.571 billion, Fannie Mae said Wednesday.
The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, the FHFA has controlled their financial decisions.
Taxpayers have spent more than $150 billion to prop up Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could top $259 billion to support the companies through 2014 after subtracting dividend payments.
Fannie has received more than $116 billion so far from the Treasury Department, the most expensive bailout of a single company.
Fannie officials say losses have increased in recent quarters for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.
Fannie's October-December loss takes into account $2.6 billion in dividend payments to the government. That compares with a loss of $2.1 billion in the fourth quarter of 2010.
By Msnbc.com staff and wire The Associated Press contributed to this report.
Rob Alley, Realtor/Owner of Virginia Real Estate Solutions at RE/MAX Assured Properties
Taxpayers have spent more than $150 billion to prop up Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could top $259 billion to support the companies through 2014 after subtracting dividend payments.
Fannie has received more than $116 billion so far from the Treasury Department, the most expensive bailout of a single company.
Fannie officials say losses have increased in recent quarters for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.
Fannie's October-December loss takes into account $2.6 billion in dividend payments to the government. That compares with a loss of $2.1 billion in the fourth quarter of 2010.
By Msnbc.com staff and wire The Associated Press contributed to this report.
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