Spread this message with Digg, Del.icio.us, Reddit, or Stumbleupon, and subscribe to the RSS Feed to track articles

$2.3 Billion in Losses for Fannie Mae

Published 08/08/08 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

Mortgage-finance giant Fannie Mae reported second quarter losses Friday morning at more than $2.3 billion. This report comes just two days after Freddie Mac – a sibling company and the second largest mortgage firm in the nation – posted one of the worst quarterly losses in its history, according to Bloomberg.

Fannie Mae and Freddie Mac combine to own or guarantee more than $5 trillion of the United States’ home loans, or approximately 42 percent of the total $12 trillion in outstanding mortgages.

Last quarter’s $2.3 billion loss follows a first quarter fiscal disaster, which buried Fannie in more than $2.2 billion in diluted shares. The continued struggles of America’s two largest mortgage and finance companies are symptomatic of the endemic weakness of the US economy.

Government bailouts built on deficit spending are not what this nation needs to climb out of a recession. According to Fannie Mae’s Aug. 8, 2008 press release, the company is directing itself toward fiscal responsibility, but effective changes take time to implement. Meanwhile, this country is still suffering from the collapse of the housing and credit markets.

Source Bloomberg:

Fannie Mae, the largest U.S. mortgage- finance company, sliced its dividend after posting a fourth straight quarterly loss and said the worst housing slump since the Great Depression is deepening.

…

Fannie's results come two days after Freddie surprised investors with a loss that was three times wider than analysts anticipated.

…

Fannie's net loss was $2.3 billion, or $2.54 a share, compared with net income of $1.95 billion, or $1.88 a share, in the same quarter a year ago.

…

Fannie and Freddie, government-chartered enterprises created to boost mortgage financing, own or guarantee 42 percent of the $12 trillion of U.S. home loans outstanding.

Click Here For Solutions To America's Economic Problems:

Front Page Photo by Tracy O- Flickr © Some rights reserved

Click here to contact your Representative in Congress.

Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.