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Are Freddie And Fannie Insolvent? - Page 4

For all intents and purposes, Fannie and Freddie now US Government Holdings. The government has warrants to take over the majority of the company. The stockholders (as it should be) will be the last to be paid in the event that Fannie and Freddie are sold off. The best things stockholders can hope for is that the market recovers in time and can pay back the government...then they might be able to get their cash back, but definitely not at the top value they could have jumped out at one year ago. However, if you really think about it, we are all stockholders now since the government is the owner. Anyway, if you are holding on to any Fannie or Freddie stock, be prepared to sell it and take your loss (some will do this for tax reasons) or be prepared to hold it LONG term and hope.

Oh, and as with the Savings and Loan failure and subsequent bailout of the 80's, there will be some people going to jail on this one too. The actions of management in Fannie, Freddie, Bear Stearns and Lehman are criminal. Interesting in that the deregulation of the S&L's lead to their failure just like the deregulation of the mortage and investment companies. For those that do not remember....

Source 3

This crisis was a backbone of our high debt going into the 90's. In total, 747 S&L's failed. The buyout was 160Billion USD. That will look small compared to this screwup of deregulation.

Edited: Vincenzo on 16th Sep, 2008 - 8:36am

Insolvent Fannie Freddie Are

Fannie Mae warns of insolvency

Fannie Mae, the troubled US mortgage finance giant, has said that the $100 billion bailout it recieved from the US government may not be enough to keep it solvent.
Ref. Source 4

Are Freddie And Fannie Insolvent? History & Civil Business Politics

Is the Fannie-Freddie debacle the result of a backroom deal?

Huh? Wait a minute, I thought Freddie had just written down $2.4 billion in December and was forced to raise $6 billion to increase its shaky capital base. An how in the world does a company like Fannie Mae with nearly $900 billion in assets (many of them junk mortgages) on only $44 billion in capital as of December 31st 2007, purchase hundreds of billions more to add to its bloated balance sheet? I"ll tell you how. A bailout guarantee. Ref. Source 4

Page 4 Insolvent Fannie Freddie Are

Fannie, Freddie could be forever tied to feds

Despite assurances that the takeover of Fannie Mae and Freddie Mac would be temporary, the giant mortgage companies will most likely never fully return to private hands, lawmakers and company executives are beginning quietly to acknowledge. Ref. Source 9

Insolvent Fannie Freddie Are

Fannie, Freddie are facing makeover
White House panel to plot future of mortgage giants

WASHINGTON - The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said. The bad debts the firms own would be placed in new government financial institutions - so-called "bad banks" - that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate. Ref. Source 1

Are Freddie And Fannie Insolvent?

So let me get this right. All the bad loans are going to private Government owned banks where they are going to all they can to get their money while the good loans stay with a government run agencies of Freddie and Fanny. It seems to me that this is all the same.

Are Freddie Fannie Insolvent - Page 4

Fannie Mae seeks $15B more in government aid after 3Q loss:

The government-controlled company continued to see a dramatic surge of borrowers fall behind as the unemployment rate climbs. At the end of last month, about 4.7% of Fannie Mae's borrowers had missed at least three payments. That's nearly triple last year's level. Ref. Source 3

Are Freddie Fannie Insolvent Politics Business Civil & History - Page 4

'Large wave of foreclosures' ahead?

Mortgage financier Freddie Mac reported today that a record 4 percent of its borrowers are at least three months behind on their loans and in danger of foreclosure. Ref. Source 9