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Fannie bailout and Aig
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I believe Fannie ,Frediie balout is connected to Aig bailout on the same gorunds.Saving US banks..The operation was successful.However there should be a committee examining which bank got the best advantage.Why Lehman went down,GS prospered further?
The taxpayer bailout of Fannie Mae and Freddie Mac will almost certainly be the most expensive of the financial crisis.
The government seized control of the two largest purchasers of U.S. home loans in September 2008, as the deepest housing crisis since the Great Depression forced a tidal wave of mortgage delinquencies and foreclosures that have eaten away at their capital.
On Friday, Fannie Mae reported a fourth-quarter loss of more than $16 billion and said it would tap the Treasury for $15.3 billion in cash. Fannie Mae has now asked for $76.2 billion from the Treasury's unlimited credit line.
Freddie Mac, which reported a fourth-quarter loss of $7.8 billion last Wednesday, said it did not require a capital draw from the government last quarter but would need more funds this quarter as defaults raised credit-related costs. Freddie Mac has so far drawn more than $50 billion from the Treasury.
Concern about the size of the companies' mortgage investment portfolios and executive compensation were also cited in the letter as reasons to urgently investigate the administration's backing.
A plan to unwind the "ever-growing commitment" to the two companies was expected in the fiscal 2011 federal budget but has still not been forthcoming.
With much of the private markets shut down, the government has relied heavily on Fannie Mae and Freddie Mac to buy home loans and repackage them as securities to keep funding flowing in the fragile housing market.
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: 3/1/2010 |
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© 2006 Mert TOKER All Rights Reserved. |
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