Bailout is Back: Fannie and Freddie Likely Need ‘Additional Treasury Investment’ After Derivatives Losses
‘There is trouble again for federal mortgage backers and bailout queens Fannie Mae and Freddie Mac, whose failures helped to trigger the housing market collapse and subsequent 2008 economic crisis.
The government enterprises are again turning their lowest profits since the recovery, thanks to derivatives losses – where most of the mortgage lender money is invested:
Fannie Mae will make its smallest payment to taxpayers in more than four years after large derivatives losses crimped its fourth-quarter profit, the government-controlled mortgage financier said on Friday.’
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