Freddie Mack, which was seized last year by federal regulators, is going back to Uncle Sam for a $30 billion infusion after announcing a staggering loss of $50 billion. This is on top of the $15 billion requested by Fannie Mae a few weeks ago after announcing a loss of more than $60 billion last year.
The two companies combined own or guarantee more than 30 million home loans with an aggregate value north of $5.5 trillion – more than half of all home loans.
LESS THAN ZERO
Freddie was forced to make the request because the company is now worth less than zero.
WHAT DOES THIS MEAN FOR YOU
There’s good news, moderately good news, and some bad news.
First, the good news. My kids’ hamster, which they name “Gerbil,” is now worth more than Freddie Mack because he (or she, we’re not sure) doesn’t own anything, and doesn’t owe anything. As result, Gerbil is worth zero, which is more than we can say for Freddie. Chances are, you too are worth more than Freddie.
Now, the moderately good news. Since Freddie and Fannie are both government owned, the cash infusions will keep them afloat while they attempt to repair the mortgage crisis, and they will be more aggressive about helping homeowners with short sales, forbearance agreements, and loan modifications.
Now, the bad news. First, despite the fact that you are probably more financially stable than Freddie and Fannie combined, you won’t be getting a $30 billion bailout. On top of that, some of your hard earned tax dollars will be going to bailout the ailing giants.




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