Fannie Mae Loses $11.5 Billion in Q1 2010

Wow. Freddie and Fannie reported a loss $11.5 Billion dollars and sees no end in sight for future losses. From their press release:

Due to current trends in the housing and financial markets, we continue to expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury pursuant to the senior preferred stock purchase agreement.

Fannie and Freddie asked for another $8.4 billion from Treasury and last month received $15.3 billion from Treasury, bringing the tally up to $92.7 billion dollars.

Our estimated market share of new single-family mortgage-related securities issuances was 40.8 percent in the first quarter of 2010, compared with 38.9 percent in the fourth quarter of 2009. Our mortgage credit book of business was $3.18 trillion as of March 31, 2010.

Fannie and Freddie also have a host of Mortgage Backed Securities on their books and look at these statements in regard to them:

  • Elimination of fair value losses on credit-impaired loans acquired from MBS trusts we have consolidated, as the underlying loans in our MBS trusts are already recognized in our condensed consolidated balance sheets.
  • Our portfolio securitization transactions that reflect transfers of assets to consolidated MBS trusts do not qualify as sales, thereby reducing the amount we recognize as portfolio securitization gains and losses.
  • We also no longer recognize gains or losses on the sale from our portfolio of available-for-sale MBS securities that were issued by consolidated MBS trusts, because these securities are eliminated in consolidation.
  • We no longer recognize fair value gains or losses on trading MBS that were issued by consolidated MBS trusts, which reduces the amount of securities subject to recognition of changes in fair value in our condensed consolidated statements of operations.

They no longer recognize their losses on worthless mortgages?

Delinquencies also increased:

Our single-family serious delinquency rate increased to 5.47 percent as of March 31, 2010 from 5.38 percent as of December 31, 2009, but grew at a slower pace than in each quarter of 2009 as we continued to work with our servicers to reduce delays in completing workouts and more modifications and foreclosure alternatives are being pursued.

Foreclosures increased:

We acquired 61,929 single-family real estate-owned properties through foreclosure in the first quarter of 2010, compared with 47,189 in the fourth quarter of 2009. As of March 31, 2010, our inventory of single-family real estate owned
properties was 109,989

This news barely gets a yawn in the press. It's astounding to read a press release telling the public they are hemorrhaging money and require infinite taxpayer funds for an indefinite period.

Calculated Risk has a post on homes with negative equity (complete with graphs). Las Vegas has 75% of their residential property under water. The national rate is 24%, but it's clear there are regional pockets, so hopefully we can get a map on percentages of mortgages more than the home is worth.

Subject Meta: 

Forum Categories: 

Is Zerohedge giving you a reset?

I'm beginning to think ZeroHedge's server is messed up because it's crashing more than I can get it to load.

On Fannie/Freddie, we need to dig into the numbers. Here's question I have. If, the U.S. government just did an overall principle reduction on mortgages, across the board, would it be less money than the never ending Fannie/Freddie black hole plus all of the MBSes on the books?

I frankly have not done my homework and this is one huge assignment (probably a MS thesis level assignment frankly), but this is ridiculous and there is no end game in site from what I can see.

People are really moving into strategic defaults with Freddie Mac asking people to not do it on moral principle. They don't get it. If the Banksters can just default and suck up taxpayer money, if corporations have no ethical and moral responsibility to hire Americans and invest in America, can throw away their workers to the point we're all temp now, why should individuals act any differently? They have been using credit scores to scare the shit out of people and relying on that moral value that one should meet their financial commitments, but those same morals and ethics no longer apply the minute one turns oneself into INC.

You must have Javascript enabled to use this form.