Fannie Mae Asks For $15 Billion More And Charges Rent To Foreclosed Borrowers
In a couple signs that the housing market is still far from fully recovered, Fannie Mae has asked the Fed for $15 billion more in funds to stay alive at the same time they announced plans to allow borrowers in foreclosure to remain in the house by making lease payments.
The recent news comes as Fannie Mae announces they lost a staggering $18.9 billion in the latest quarter. That's $4 billion worse than the prior year quarter.
If the Treasury Department gives FNM the $15 billion, it will be the fourth time the mortgage lender has tapped the system.
The money paid to FNM is huge. They has so far received a total of $44.9 billion in federal government assistance, under a senior preferred-stock purchase agreement.
Fannie Mae's Deed for Lease Program is expected to help stabilize the U.S. housing market. Most of the borrowers who are eligible for the program have mortgages that are "underwater." This will help them stay in their homes for the time being, and will allow Fannie Mae to receive some income.
In related news, the company also said it plans on selling $2.6 billion in unused tax credits. Share prices have dropped 10% in pre-market trading.
Courtesy: WSE
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