Fannie Mae seeks fresh gov’t aid

Sunday, 28 February 2010 06:12 PM Maui A. Hermitanio

Fannie Mae (Federation National Mortgage Corp.) is asking for a federal cash infusion of USD15.3 billion after posting another big loss in the fourth quarter of last year. The new request for aid will bring Fannie Mae's total to more than US$75 billion, Straits Times reported.

The mortgage finance company, seized by federal regulators in September 2008, reportedly lost USD16.3 billion, or USD2.87 a share in the October to December period. It compares with a loss of USD25.2 billion or USD4.47 a share, in the 2008 period.

For 2009, Fannie Mae lost USD74.4 billion, or USD13.11 a share, including USD2.5 billion in dividends paid to the government. That compares with a loss of USD59.8 billion, or USD24 a share, a year earlier.

According to Associated Press, Fannie Mae has racked up losses totaling USD136.8 billion for the past three years.

According to reports, the rescue of Fannie Mae and sister company Freddie Mac (Federal Home Loan Mortgage Corporation) is turning out to be one of the most expensive aftereffects of the financial meltdown.

Earlier, Freddie reported a loss of almost USD26 billion for last year. The company didn't request any more money, but expect to do so later this year. The total bill for the duo has topped US$127 billion.

Huffington Post reported that late last year, the Obama administration pledged to cover unlimited losses for both companies through 2012, lifting a cap of USD400 billion.

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