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25 March 2017 21:24 (South Africa)

Fannie Mae ends third quarter with a whopping $18.9 billion hole in its accounts

Fannie Mae, America's biggest funder of home loans, announced that the combination of mortgages (housing bonds) gone sour and the US government’s own mortgage foreclosure prevention programme, had given it a $18.9 billion loss in the last quarter. The result? The Treasury, ahem, the taxpayer, will have to cover the gap in its balance sheet. The lender was seized by the government last year at the height of the financial crisis. It says there will be more red ink in the coming months as well. This information will probably have dire consequences for a fragile housing market, even though home sales and prices are rebounding a bit in some parts of the country. Analysts say these results mean Fannie Mae is likely to remain under federal conservatorship indefinitely - perhaps even for a full decade. Read more: Deal Blog at The New York TImes, New York Times

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