After losing $8.7 billion in the first quarter, Fannie Mae has reported a loss of $5.2 billion in the second quarter. Fannie Mae still owes the Treasury $104.8 billion, but now the Federal Housing Finance Agency is requesting another 5.1 billion dollar bailout from the Treasury.
Fannie Mae has lost $130 billion between 2005 and 2008 from mortgages. Unfortunately, future defaults and charge-offs on the single-family book of mortgages are expected to continue over a period of years.
However, according to HousingWire, loans acquired between 2005 and 2008 accounted for roughly 34 percent of Fannie’s entire book of business as of the end of the second quarter, which is down from 39 percent last year.
Fannie Mae has provided nearly $2 trillion in liquidity to the mortgage market and remains the largest issuer of mortgage-baked securities.
Fannie Mae guaranteed $306 billion in mortgages allowing more than 1.2 million single-family and multifamily loans for home-buyers. As a result, Fannie Mae owns roughly one-fifth of the U.S. outstanding debt on multifamily loans.
“We remain the largest source of liquidity for the U.S. mortgage market, and we are committed to creating long-term value by helping to build a stable, sustainable housing market for the future,” said Fannie Mae CEO Michael Williams. “We are focused on reducing taxpayer exposure by limiting our credit losses and building a strong new book of business. Our new book of business is now nearly half of our overall single-family book and we expect these new loans will be profitable over their lifetime.”