Fannie Mae seeks $19B in US aid after 1Q loss
WASHINGTON — Fannie Mae issued a grave warning about its future today, saying it needs $19 billion in additional government aid as job losses grow and risky loans made during the housing boom go bad at a disquieting pace.
The mortgage finance company, which already got a $15 billion government bailout in March, warned it may need even more money and won't be profitable for the foreseeable future.
In a regulatory filing the company said "there is significant uncertainty as to our long-term financial sustainability." Even more government aid, it added, "may not be sufficient to keep us in a solvent condition."
Fannie Mae posted a quarterly loss of $23.2 billion, or $4.09 per share. That compares with a loss of $2.5 billion, or $2.57 a share, in the year-ago period.
The government, which seized control of Fannie Mae and its sibling Freddie Mac last September, has already spent about $60 billion to prop up the two companies. Fannie Mae's request Friday brings the total to $79 billion.
The Obama administration's estimates the taxpayer bill for Fannie and Freddie will hit $147 billion out of a potential $400 billion by the end of September 2010.
But some analysts think that figure is optimistic, especially as Fannie and Freddie are called upon to put in place the government's plans to refinance or modify up to 9 million home loans.
