Examiner
Hoping to keep the news low-keyed and under-reported, Fannie Mae announced late Friday afternoon after the markets closed that it had lost over $74 billion in 2009, bringing its 3-year loss totals to $137 billion.
This is in addition to Freddie Mac's $80 billion loss during the same period.
(AP Photo/Susan Walsh, File)
Fannie and Freddie have continued to squander taxpayer dollars even after the massive bailouts by the federal government. In fact, the mortgage giants lost more money after the bailouts than they did before.
Tom Blumer at NewsBusters put it in these terms:
For those keeping score at home, Fan's three-year losses of $137 billion, as reported by the Associated Press's Alan Zibel yesterday evening, plus the roughly $80 billion lost in the same period at kissing cousin Freddie Mac ("Fred"), is over three times the highest-end estimate of $66 billion in total losses at household word Enron, and over four times the roughly $50 billion investors lost to household name Bernie Madoff. Enron and Madoff are history; Fan and Fred are just warming up, and a large portion of the public has no idea who they are.
However, the big news in the midst of this late-Friday afternoon announcement is that Fannie Mae says it will need another $15.3 billion in taxpayer cash by the end of March.
The very entities that are responsible for the financial meltdown in 2008, Fannie and Freddie, continue to be 'enabled' by the government to go on their spending binges with little or no incentive to curtail their reckless habit.
Not only that but the 2 mortgage giants engaged in outright fraud concerning the nature of the mortgages they were purchasing:
New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A.
In general, a subprime mortgage refers to the credit of the borrower. A FICO score of less than 660 is the dividing line between prime and subprime, but Fannie and Freddie were reporting these mortgages as prime, according to Mr. Pinto. Fannie has admitted this in a third-quarter 10-Q report in 2008.
An Alt-A mortgage is one in which the quality of the mortgage or the underwriting was deficient; it might lack adequate documentation, have a low or no down payment, or in some other way be more likely than a prime mortgage to default. Fannie and Freddie were also reporting these mortgages as prime, according to Mr. Pinto. (Source: Wall Street Journal).
With government constantly scolding private corporations, the U.S. Healthcare System, and automakers like Toyota over their shortcomings, one would think that the Obama Administration would be quick to cut off funding from Fannie and Freddie and demand criminal investigations.
Not so fast:
Speaking of which, the Obama administration, which is constantly scolding us that the status quo in the best health care system in the world is unacceptable, seems perfectly comfortable with things as they are at Fan and Fred, and even with expanding their damage. (Source: Newsbusters).
Not only will Fannie Mae get the extra bailout money it needs but apparently under this administration the 'culture of corruption' keeps growing.