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Tuesday, February 10, 2009

Fannie and Freddie: Need More Money

No way! They need more than the original $200 billion? Whocouldanode?

Additional money for Fannie and Freddie needs to be added to the already truly awesome $9.7 Trillion on Bailouts already pledged. (Both companies continue to lower their credit standards.)

To say the American illusion of prosperity has been shattered would be an understatement.

"Look! The emperor has no clothes!"

Now we wait to find out how much money Timbo "Turbotax" Geithner is about to burn with his super bank bailout plan...

Fannie, Freddie Funding Needs May Pass $200 Billion, FHFA Says: "Fannie Mae and Freddie Mac, the mortgage-finance companies seized by regulators, may need more than the $200 billion in funding pledged by the U.S. government if the housing market continues to deteriorate, Federal Housing Finance Agency Director James Lockhart said.

The companies’ needs will depend largely on the direction of home prices, Lockhart said in an interview in Las Vegas yesterday. His comments followed statements from Fannie Mae in November and Freddie Mac Chairman John Koskinen last week that the government’s funding commitment through 2009 may fall short of what the companies need to make good on their obligations.

“When we sized the amount in September, we obviously looked at stress tests and what was happening in the marketplace,” Lockhart said. “There’s been some significant events since then that weren’t in our forecast.”

The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth, according to a Feb. 3 report from Following a record boom, home prices are down 25 percent on average since mid-2006 amid a tightening of lending standards and an economic recession, the S&P/Case-Shiller Composite 20-city price index shows.

Freddie Mac and Fannie Mae are the largest U.S. mortgage- finance companies, owning or guaranteeing $5.2 trillion of the $12 trillion home-loan market. The government seized control of Fannie Mae and Freddie Mac after their losses threatened to further disrupt the housing market, and pledged to invest as much as $100 billion into each company as needed if the value of their assets drops below the amount they owe on obligations."