Thursday, November 05, 2009
After posting its ninth consecutive quarterly loss - some $19 billion that, somehow, doesn't seem like all that much money any more - ward of the state Fannie Mae is now seeking another $15 billion in federal aid in order to square its books (for the next three months).
The bad news is that things are only getting worse.
Despite efforts to modify existing home loans, delinquencies have nearly tripled from a year ago as unemployment has continued to rise, almost five percent of all Fannie Mae's mortgages now 90-days or more past due.
The company announced a new program that would allow homeowners who are about to lose their home to foreclosure to rent back their home for a year at the prevailing market rate.
To some, this could represent a monthly savings of $1,000 or more relative to their mortgage payment, but then, considering that many homeowners who are about to lose their homes to foreclosure have been paying nothing at all for the last six, nine, or twelve months, this could also be a sharp increase.
Jay Ryan, a Fannie Mae vice president, said the program helps "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities".
It also makes for a much more pleasant holiday season...
In this AP report, Peter Schiff quipped, "Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded. It's going to cost a fortune."