Hit by huge loss, Fannie Mae seeks more federal aid

Mortgage giant expects further losses and continued need for help

By Zachary A. GoldfarbFriday, November 6, 2009  The Washington Post

"Fannie Mae, the federally controlled mortgage finance giant, said Thursday it lost $19 billion in the third quarter and had submitted a request to the Treasury Department for $15 billion in more aid to stay afloat."

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/05/AR2009110505223.html

"District-based Fannie Mae and its McLean sibling, Freddie Mac, were seized in early September 2008 by the federal government. Since then, Fannie Mae has lost $111 billion. The $15 billion in aid it has requested comes on top of $45 billion it already received. Freddie Mac has received $51 billion in aid.

In total, the seizure of Fannie Mae and Freddie Mac has cost taxpayers $121 billion, among the costliest of the government's interventions to stabilize the financial markets.

Fannie Mae said its losses and its need for additional government aid are both likely to continue. And it said activities it was undertaking at the behest of the Treasury Department, such as modifying mortgages to help homeowners avoid foreclosure, were magnifying its losses.

Separately from its earnings announcement, Fannie Mae also unveiled a program to help homeowners facing foreclosure. Under the Deed for Lease Program, the homeowners would transfer ownership to the lender, but could stay in the home for a period of time by leasing the home and paying rent, which is often lower than a mortgage payment."