Author Topic: Fannie taps lifeline after $59B in losses  (Read 323 times)

Bindare_Dundat

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Fannie taps lifeline after $59B in losses
« on: February 26, 2009, 05:40:46 PM »
Mortgage finance company reports $25 billion quarterly loss and receives $15 billion from the Treasury Department.

Hammered by the ailing housing market, mortgage finance giant Fannie Mae said Thursday it would tap its lifeline from the Treasury Department after reporting $58.7 billion in losses for 2008.

The company, a crucial source of funding for mortgage lenders, said it would draw down $15.2 billion of its $200 billion federal line of credit. In return, the government will receive preferred shares.

And it gave a dour view of the housing market -- saying it expects peak-to-trough price declines to be in the 33% to 46% range, up from the 27% to 32% range it gave in the previous quarter. For 2009, it predicts home values will drop 12 to 18%.


Bindare_Dundat

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Re: Fannie taps lifeline after $59B in losses
« Reply #1 on: February 26, 2009, 05:41:50 PM »
More AIG bailout considered
Washington could finance the purchase of assets, and loosen aid terms to the insurance giant, sources say.

The U.S. government may agree to finance the purchase of some American International Group Inc. businesses, take stakes in assets and ease terms of its aid package to the insurer, a person familiar with the matter said Thursday.

These are some of a wide range of options under discussion between the government, the insurer and credit rating agencies, as AIG, once the world's largest insurer by market value, looks to avoid a credit downgrade that would trigger a host of liquidity issues and hurt its business, the source said