After receiving government assistance for over a year, Fannie Mae now needs $19 billion more to continue to function as a top mortgage lender.
A little bit over a year ago, Fannie Mae and Freddie Mac had had the largest fall out in the history of the mortgage industry. They were basically gobbled up by the government. The government could not let these entities go bankrupt as they were the backing of a majority of the home loans in America. Even after the government has been providing funding for over a year, Fannie Mae is now requesting another $19 billion to stay afloat.
It is quite amazing how bad the subprime mortgage crisis has affect the banks and lenders of this country. Subprime borrowers have not been able to get major loans in well over a year. With that being the case, banks are still finding out that they have massage amounts of these mortgages on their balance sheets and the only way to get them off is for the government to buy them up.
The government has been doing everything in their power to solve this issue by buying over $1.75 trillion in mortgage backed securities, but it may take much more than that as all of the financial institutions are still in great danger of going under. We can only wonder where we will go from here as the Federal Reserve Bank has pulled out all stops to get these mortgages off the balance sheets of the banks.
Over the long run we will eventually get out of this mess, but it does not seem like it is going to happen soon. Every time we hear some good news, some horrific news follows shortly after.
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