Are you ready for more bailout?Freddie Mac seeks $6.1B in US aid after 1Q loss?
While your worrying about Ms. California here what’s coming through the back door.
WASHINGTON – Mortgage giant Freddie Mac is looking for $ 6.1 billion in additional government aid as the cost to taxpayers from the housing market bust keeps growing.
The McLean, Va.-based company, seized by federal regulators in September, on Tuesday posted a loss of $ 9.9 billion, or $ 3.14 per share, for the quarter ending March 31. That compared with a loss of $ 149 million, or 66 cents a share, in the year-ago period.
The results were driven by $ 8.8 billion in credit losses due to soaring delinquency rates and falling home prices, and $ 7.1 billion in writedowns of the value of its mortgage-backed securities. More than $ 63 billion of Freddie Mac’s loans were either 90 days overdue or in foreclosure at the end of March, nearly triple year-ago levels.
The request for federal aid is Freddie Mac’s third since the takeover, for a total of about $ 51 billion.
Sibling company Fannie Mae last week requested $ 19 billion in additional government aid, bringing the total for both companies up to $ 85 billion out of a potential $ 400 billion government lifeline.
“This was another difficult quarter for Freddie Mac, as declining home prices and the weak economy continued to take a toll on our results,” Freddie Mac’s interim chief executive, John Koskinen, said in a statement.
But he said there were “preliminary signs of slowing in home price declines as low mortgage rates and high affordability take hold.”
The White House budget office estimates the tab for rescuing the two companies will reach $ 173 billion. But even that number could wind up being optimistic, especially as Fannie and Freddie are called upon to put in place the government’s plans to refinance or modify up to 9 million mortgages.
Washington-based Fannie Mae and Freddie Mac play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, the companies own or guarantee almost 31 million home loans worth about $ 5.5 trillion. That’s about half of all U.S home mortgages
Obviously we need to fire the CEO’s just like GM.
I will be more specific with my current situation in order for you to get a clearer picture of finances. My current home loan began in May 2007 at 6.375% for 360mths (585.00/mth) Insurance and taxes are not escrowed. I have a 2nd mortgage which began May 2008 at 8.1048% for 59mths (400.00/mth). I also have a bankruptcy (chapt. 13) which began July 2007 at 8.00% for 60mths which is deducted from my paycheck (270.00/biweekly). Lending Tree is encouraging me to consolidate & refinance at 6.00% for 30 yrs. with closing cost of about 6,000.00. It would free up a lot of money, but I would be forced to pay mortgage insurance since it would total more than 80% of my appraisal. The loan would be for about 153,000.00. My current total mthly payment is 1,565.00. Refinancing would decrease my payment to 950.00/mth. At least that is what I am being told. The loan company is saying this would free up my money and start to repair my credit. It is hard for me to grasp why I should stretch my 2nd mortgage and bankruptcy into 30 years instead of the 4 years I lack paying them off. I am currently with Washington Mutual and have been very satisfied. What should I do? I am having a hard time stretching money from month to month.