US mortgage finance giant Fannie Mae has released a statement on Monday. stating that it needs an additional government bailout of 8.4 billion dollars after reporting a 2010 first-quarter net loss of 11.5 billion dollars.
"Our first-quarter results were driven primarily by credit-related expenses, which remain at elevated levels due to weaknesses in the economy and the housing market," the company said in a written statement.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie, lifting an earlier cap of $400 billion. And with the housing market still on shaky ground, Obama administration officials say it is still too early to draft any proposals to reform the two companies or the broader housing finance system.
Created by Congress, Fannie and Freddie buy mortgages from lenders and package them into bonds that are resold to global investors. Together the pair own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.
The two companies, however, loosened their lending standards for borrowers during the real estate boom and are reeling from the consequences. As the housing bubble burst, they were unable to raise enough money to stay afloat, and the government effectively nationalized them.
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