Fannie,Mae,asks,government,for business, insurance Fannie Mae asks government for $2.5 billion aid anew


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After losing another $3.46 billion in the third quarter, Fannie Mae, the government-sponsored mortgage firm, has asked the government yet another $2.5 billion in financial aid. Although the posting for the July-September quarter is significantly lower than the $19.8 billion loss it suffered during the same period last year, still, it accounts for $2.1 billion in dividend payments to the government. It can be recalled that the government had included both Fannie and Freddie in a bailout program estimated to cost the taxpayers the amount of up to $259 billion. This is on top of the $133.4 billion that both firms are expected to receive from the Treasury department, earning for it the public perception that they could be the bailout program’s most expensive ventures. Last quarter, Fannie Mae had asked for a $1.5 billion federal aid. So far, the dividend payments that both Fannie and Freddie had already made amount to $16.7 billion since the start of the bailout program. Fannie had also expressed concerns that the nationwide foreclosures moratorium could increase delinquency rates, raise costs and prolong foreclosure timelines. The National Association of Realtors released data that showed a weakening of the September figures in relation to home sales, which could be an effect of the thousands of foreclosure moratorium across the country. But Fannie said it is continuing efforts to mitigate its losses and accumulate more funds by building more profitable business and tightening its lending standards. Freddie, on the other hand, had also asked the government for an additional $100 million in government aid after posting narrower loss in the third quarter compared to the preceding period. Although the decrease in loss could be welcome news, it fails to, however, signal the impression that trouble is over for these mortgage firms. Both Freddie and Fannie had been experiencing severe losses and had since imposed stricter regulations on their lending standards as bad loans keep appearing on their books. There are many issues that have been plaguing the housing market these past few months. The growing uncertainty over the credibility and integrity of the entire industry adds to the perennial problems of slow economic growth, lack of job opportunities and tight credit standards and could be discouraging people from buying.

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