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Fannie Mae. You truly are the Dumbest gift that keeps on giving.
Of course, that's because you keep on getting and getting.
The humbled home-loan provider announced Wednesday that it needs to go back to the well and seek $4.6 billion more in federal aid after reporting a $2.4 billion fourth-quarter loss. As a result of its latest futility, Fannie Mae's loss for 2011 rose to $16.9 billion from $14 billion a year ago.
Yep, it sure is hard to turn a profit when you are still sitting on a ton of toxic crap in the form of pre-2009 subprime home loans. Nevertheless, Fannie's brass says the most noxious of its holdings will soon lose their stink.
"We think that we have reserved for and recognized substantially all of the credit losses associated with the legacy book," said Chief Financial Officer Susan McFarland.
For those who may have forgotten, Uncle Sam seized Fannie Mae and its sibling
Freddie Mac back in September 2008, preventing the pair from insolvency. Since then, Fannie Mae has been propped up by borrowing more than $116 billion from taxpayers.
And as a result of a juvenile spat with fellow bailout baby
Bank of America(BAC - Get Report), Fannie may have to borrow even more. Last week, Bank of America said it had ceased selling new mortgages to Fannie over a bad loan-buyback dispute.
This week, however, Fannie took umbrage and blamed Bank of America for the breakdown between the two former buddies. In an
SEC filing, Fannie said Bank of America had "slowed the pace of its repurchases" in the fourth quarter, and that as a result of its "failure to honor its contractual obligations," its outstanding repurchase requests with Bank of America spiked.
Cutting to the chase, McFarland said that if Bank of America didn't honor Fannie's demands, "ultimately the taxpayer pays."
Really Sue? Now tell us something we don't know.
Written by Gregg Greenberg in New York.