"Fannie Mae seeks $7.8 billion in taxpayer aid as losses widen
By Derek Kravitz
The Associated Press
Posted: 11/09/2011 01:00:00 AM MST
WASHINGTON Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter.
The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits, and declining home prices caused more defaults on loans it had guaranteed.
The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most-expensive bailout of the 2008 financial crisis. The government estimates that the figure could reach up to $220 billion to support the companies through 2014 after subtracting dividend payments.
Fannie has received $112.6 billion so far from the Treasury Department, the most-expensive bailout of a single company.
Fannie's losses are increasing for two reasons: Some home owners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
Read more: Fannie Mae seeks $7.8 billion in taxpayer aid as losses widen - The Denver Post »www.denverpost.com/business/ci_1···dJnSV9Ur