Monday, May 09, 2011

News from The Associated Press

News from The Associated Press"WASHINGTON (AP) -- Fannie Mae asked the government Friday for an additional $8.5 billion in aid after declining home prices caused more defaults on loans guaranteed by the mortgage giant.

The company said it lost $8.7 billion in the first three months of the year. Those losses led Fannie to request more than three times the federal aid it sought in the previous quarter. The total cost of rescuing the government-controlled mortgage buyer is nearing $100 billion - the most expensive bailout of a single company."

These continued losses are driving the plan to privatize Fannie and Freddie. What will happen to the mortgage market if Congress follows through with that plan? I think home ownership rates will go down, never to go back up again.

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