There is much wailing and gnashing of teeth over Fannie's request for another $8.4 Bil. following their twelfth straight quarterly loss.
That's what the Christmas Eve massacre (of the U.S. taxpayer) was all about. Remove the cap on FNM/FRE bailouts and open the spigot to the tune of UNLIMITED ASSISTANCE, up from $400 Bil.
Plus whatever paper they take off the Federal Reserve's balance sheet, and I do mean sheet, $1.25 Tril. worth.
Here's something positive Fannie's doing, reminiscent of the old trader's joke when asked to D/K (don't know) a trade:
"I don't want it, that's why I sold it to you"From American Banker via Structured Finance News:
Mortgage lenders plagued with requests from Fannie Mae to buy back defective loans can now take comfort in the knowledge that they're far from alone.
Fannie said Monday in its first-quarter securities filing that it made servicers buy back or reimburse it for losses on $1.8 billion of loans, 64% more than a year earlier. It was the first time the government-sponsored enterprise disclosed the volume of its repurchase demands; previously Fannie only acknowledged that such demands had been on the rise since 2008 as delinquencies worsened.
Freddie Mac also has been sending more loans back to lenders: $1.3 billion in the first quarter, up 65% from a year earlier, according to its first-quarter filing last week.
In February Fannie announced a "loan-quality initiative" designed to reduce loan repurchase requests. If lenders do a better job on the front end of making sure the loans they deliver meet the GSE's guidelines, Fannie has said, it would not have to make lenders buy back so many defective mortgages after the fact.
The initiative will begin next month. Among other changes, lenders will have to pull a second credit report just before a loan closes to check if the borrower has taken on additional debts since submitting the mortgage application.
But Fannie in its Monday filing described the initiative as a "longer term strategy" that will take time to bear fruit. The GSE reiterated that it expects repurchases to remain high for the rest of this year....MORE