This is what happens when the government gets involved in business. Fannie Me is what is known as a government sponsored enterprise. That means that when they make money they get to keep it and pass the profits along to their executives. The beauty of it is, when they lose money, the executives still get rich and the taxpayers bail them out. Naturally, they always lose money. And yet again, they’re coming back for more.
Fannie Mae reported a net loss of $6.5 billion for the first quarter as a weakening housing market dashed hopes that the company had stabilized.
Fannie said Friday it would ask the government for a fresh taxpayer infusion of $6.2 billion after paying dividends to the Treasury. The loss follows net income of $73 million during the previous quarter.
Fannie’s loss came as it increased its loan-loss reserves after it revised down its home-price forecast for 2011, and took bigger-than-expected losses on the sale of foreclosed properties. The mortgage-finance giant booked $11 billion in credit-related expenses, up from $4.3 billion last quarter.
“Right now, we’re not seeing a lot of good things in the residential real-estate markets,” said David Hisey, acting chief financial officer for Fannie Mae.
Is there anything government doesn’t get involved in that it doesn’t screw up? Seeing that we’re in a double dip housing recession, I expect this to get worse before it gets better.
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