Fannie Mae Request More Treasury Funds

Following the announcement of a loss for the second quarter of the year, albeit a smaller one than in the first quarter, mortgage insurer Fannie Mae has asked for a further injection of funds from the U.S. Treasury to the tune of $10.7 billion.

This latest request for funds follows the $15.2 billion Fannie Mae received in March and as the BBC reports, it takes the total amount allocated so far to Fannie Mae and its associate company Freddie Mac by the U.S. government to $96 billion, $45.9 billion of which has gone to the former company. And if required further funds are still available, with the Treasury having set aside $200 billion for each of the two companies CNN says are considered integral to the foreclosure rescue program introduced by the Obama administration. Despite being in the conservatorship of the Federal Housing Finance Agency (FHFA) both Fannie Mae and Freddie Mac are still private entities that, under plans the U.S. government is expected to announce next year, could remain in private hands, could find themselves being reorganized as a government agency or could simply cease to exist. Bearing in mind the stake the two companies hold in the overall U.S. mortgage market the technicalities of closing them down might seem to be the least attractive of the options available to the authorities. Fannie Mae's actual loss in Quarter 2 totaled $14.8 billion, compared to $23.2 billion lost in the first 3 months of 2009. Defaults are still increasing, if at a slower rate, as the downturn in the housing market continues to take its toll.