$2.3 Billion in Losses for Fannie Mae

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:

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