The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed.
The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments.
Fannie has received $112.6 billion so far from the Treasury Department, the most expensive bailout of a single company.
Michael Williams, Fannie's president and CEO, said Fannie's losses are increasing for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
"Despite these challenges, we are making solid progress," he said. For example, Fannie's rate of homeowners who are late on their monthly mortgage payments by 90 days or more has decreased each quarter since the beginning of 2010, he said.
When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.
Fannie said lower mortgage rates contributed to $4.5 billion in quarterly losses. While those losses are large, they are temporary and should ease in future earnings reports, said Mahesh Swaminathan, mortgage strategist at Credit Suisse.
"They are accounting losses on their books rather than economic losses," he said.
Fannie's July-September loss attributable to common shareholders works out to $1.32 per share. It takes into account $2.5 billion in dividend payments to the government. That compares with a loss of $3.5 billion, or 61 cents per share, in the third quarter of 2010.
Last week, Freddie requested $6 billion in extra aid — the largest request since April 2010 — after it reported losing $6 billion in the third quarter.
Washington-based Fannie and McLean, Va.-based Freddie own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.
Fannie and Freddie buy home loans from banks and other lenders, package them with bonds with a guarantee against default and sell them to investors around the world. The companies nearly folded three years ago because of big losses on risky mortgages they purchased.
The Obama administration unveiled a plan earlier this year to slowly dissolve the two mortgage giants. The aim is to shrink the government's role in the mortgage system, remaking decades of federal policy aimed at getting Americans to buy homes. It would also probably make home loans more expensive.
Exactly how far the government's role in mortgage lending would be reduced was left to Congress to decide. But all three options the administration presented would create a housing finance system that relies far more on private money.
If the words “Charlie bit my finger” mean nothing to you – you probably haven’t been near a computer in the past 4 years. The video of one year old Charlie biting his older brother’s finger went viral, and has accumulated almost 400 million hits.
In the past, this video might have earned Charlie’s parents a tidy little sum of money by submitting the video to a TV show a la America’s Funniest Home Videos and that would have been that.
In the age of the Internet, home videos have taken on a life of their own on YouTube, where contributors can find far bigger audiences, and a lot more money to be made. In the case of Charlie and his dad, Howard Davies-Carr, the 56 second video has received hundreds of millions of hits, and even earned itself a Wikipedia entry, turning the Davies-Carr boys into mini-celebrities, who even get asked to sign autographs. It has also earned them around £120,000 ($190,000), and they’re not alone.
Thanks to advertising on the video sharing site, through the YouTube Partner program, home videos can earn themselves anywhere from £8,000 ($12,000) to a whopping £100,000 ($160,000), if the video is an instant hit. There are several different payment schemes available on YouTube partners. You can get paid 60p ($0.95) per 1,000 views, or get paid each time someone actually clicks on an ad.
If you want to start making money off of your home videos, you will have to adhere to some of YouTube’s requirements, which include creating original content and that you “regularly regularly upload videos that are viewed by thousands of YouTube users, or you publish popular or commercially successful videos in other ways.”
Aside from making yourself a bit of extra cash on the side, you also get to access YouTube’s analytic tools and benefit from YouTube’s promotion.
With YouTube videos often going from the computer screen to network TV and guest appearances on popular talk shows like Ellen, YouTube’s potential for money and fame certainly isn’t something to be scoffed at.
Simply Zesty does make an important point, breaking down how much Charlie’s bite earned per hit – and it comes down to £0.001. While this is a minuscule figure at best, it is still money for nothing.
If you’re wondering what Charlie and his older brother Harry have been up to, along with younger brother Jasper, check out one of their latest home videos below:
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The WSOP Circuit Harveys Lake Tahoe has featured will culminate this weekend with a $1600 Main Event. Check out our recap of the ring events thus far.
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A recap of Day 4 of the PokerStars.com European Poker Tour Loutraki Main Event where the final table is set and Zimnan Ziyard leads the way.
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A look at the most recent NBA lockout news, with analysis on the potential veracity of the speculation.
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The WSOP Circuit Harveys Lake Tahoe has featured will culminate this weekend with a $1600 Main Event. Check out our recap of the ring events thus far.
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A recap of Day 4 of the PokerStars.com European Poker Tour Loutraki Main Event where the final table is set and Zimnan Ziyard leads the way.
2011 PokerStars.com European Poker Tour Loutraki Day 4: Ziyard <b>...</b>WASHINGTON (AP) — Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter.
The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed.
The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments.
Fannie has received $112.6 billion so far from the Treasury Department, the most expensive bailout of a single company.
Michael Williams, Fannie's president and CEO, said Fannie's losses are increasing for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.
"Despite these challenges, we are making solid progress," he said. For example, Fannie's rate of homeowners who are late on their monthly mortgage payments by 90 days or more has decreased each quarter since the beginning of 2010, he said.
When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.
Fannie said lower mortgage rates contributed to $4.5 billion in quarterly losses. While those losses are large, they are temporary and should ease in future earnings reports, said Mahesh Swaminathan, mortgage strategist at Credit Suisse.
"They are accounting losses on their books rather than economic losses," he said.
Fannie's July-September loss attributable to common shareholders works out to $1.32 per share. It takes into account $2.5 billion in dividend payments to the government. That compares with a loss of $3.5 billion, or 61 cents per share, in the third quarter of 2010.
Last week, Freddie requested $6 billion in extra aid — the largest request since April 2010 — after it reported losing $6 billion in the third quarter.
Washington-based Fannie and McLean, Va.-based Freddie own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.
Fannie and Freddie buy home loans from banks and other lenders, package them with bonds with a guarantee against default and sell them to investors around the world. The companies nearly folded three years ago because of big losses on risky mortgages they purchased.
The Obama administration unveiled a plan earlier this year to slowly dissolve the two mortgage giants. The aim is to shrink the government's role in the mortgage system, remaking decades of federal policy aimed at getting Americans to buy homes. It would also probably make home loans more expensive.
Exactly how far the government's role in mortgage lending would be reduced was left to Congress to decide. But all three options the administration presented would create a housing finance system that relies far more on private money.
If the words “Charlie bit my finger” mean nothing to you – you probably haven’t been near a computer in the past 4 years. The video of one year old Charlie biting his older brother’s finger went viral, and has accumulated almost 400 million hits.
In the past, this video might have earned Charlie’s parents a tidy little sum of money by submitting the video to a TV show a la America’s Funniest Home Videos and that would have been that.
In the age of the Internet, home videos have taken on a life of their own on YouTube, where contributors can find far bigger audiences, and a lot more money to be made. In the case of Charlie and his dad, Howard Davies-Carr, the 56 second video has received hundreds of millions of hits, and even earned itself a Wikipedia entry, turning the Davies-Carr boys into mini-celebrities, who even get asked to sign autographs. It has also earned them around £120,000 ($190,000), and they’re not alone.
Thanks to advertising on the video sharing site, through the YouTube Partner program, home videos can earn themselves anywhere from £8,000 ($12,000) to a whopping £100,000 ($160,000), if the video is an instant hit. There are several different payment schemes available on YouTube partners. You can get paid 60p ($0.95) per 1,000 views, or get paid each time someone actually clicks on an ad.
If you want to start making money off of your home videos, you will have to adhere to some of YouTube’s requirements, which include creating original content and that you “regularly regularly upload videos that are viewed by thousands of YouTube users, or you publish popular or commercially successful videos in other ways.”
Aside from making yourself a bit of extra cash on the side, you also get to access YouTube’s analytic tools and benefit from YouTube’s promotion.
With YouTube videos often going from the computer screen to network TV and guest appearances on popular talk shows like Ellen, YouTube’s potential for money and fame certainly isn’t something to be scoffed at.
Simply Zesty does make an important point, breaking down how much Charlie’s bite earned per hit – and it comes down to £0.001. While this is a minuscule figure at best, it is still money for nothing.
If you’re wondering what Charlie and his older brother Harry have been up to, along with younger brother Jasper, check out one of their latest home videos below:
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NBA Lockout <b>News</b>: Eventually A Hopeful Rumor Might Actually Be <b>...</b>
A look at the most recent NBA lockout news, with analysis on the potential veracity of the speculation.
NBA Lockout <b>News</b>: Eventually A Hopeful Rumor Might Actually Be <b>...</b>Previewing the 2011-2012 World Series of Poker Circuit Harveys <b>...</b>
The WSOP Circuit Harveys Lake Tahoe has featured will culminate this weekend with a $1600 Main Event. Check out our recap of the ring events thus far.
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A recap of Day 4 of the PokerStars.com European Poker Tour Loutraki Main Event where the final table is set and Zimnan Ziyard leads the way.
2011 PokerStars.com European Poker Tour Loutraki Day 4: Ziyard <b>...</b>
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