Thursday, October 8, 2009

Fannie and Freddie Continue to Struggle, Lawmakers Told (FRE; FNM)

From the New York Times' DealBook blog:
In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.

That was the somber assessment delivered Thursday by the federal agency charged with overseeing the government-controlled Fannie and Freddie, which have lost a combined $165 billion since July 2007 as their bets on the housing market went bad.

“The short-term outlook for the enterprises remains troubled,” said Edward J. DeMarco, acting director of the Federal Housing Finance Agency, in testimony before the Senate Banking Committee....

...Yet even as the broader economy tries to turns a corner, Fannie and Freddie face huge obstacles, Mr. DeMarco said.

Their books are still bleeding red as foreclosures rise and homeowners — even the highest-quality borrowers — fall behind on their mortgage payments. Several crucial positions remain vacant, and Mr. DeMarco said the agencies were worried about losing workers because of the uncertainties surrounding their fate....MORE