Market Overview

Fannie Mae and Freddie Mac Continue to Need Government Aid (FNM, FRE)

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According to the Acting Director of the Federal Housing Finance Agency, Edward J. DeMarco, housing finance giants Fannie Mae and Freddie Mac would not be able to continue to provide funding for the U.S. mortgage market without the continued taxpayer assistance from the Treasury Department.

He said at a hearing about the future of the mortgage giants, “Although the enterprises' substantial market presence has been a key step to restoring market stability, neither company would be capable of serving the mortgage market today without the ongoing financial support provided by the U.S. Department of the Treasury.”

On September 7th, 2008 FRE and FNM were, more or less, nationalized in an attempt to backstop the mortgage giants’ losses.

Marketwatch recently reported, “So far, the two mortgage entities have received nearly $145 billion in taxpayer support through the Treasury -- $83 billion to Fannie Mae and $61 billion to Freddie Mac.

The Congressional Budget Office predicts $64 billion in losses on new mortgage originations.”

Posted-In: Edward J. DeMarco Federal Housing Finance Agency MarketwatchPolitics

 

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