Fannie and Freddie - "The Money Pit"

Now let’s deal with what is probably the most costly bailout from the financial crisis. It is not a bank, it is Fannie and Freddie, which surprise surprise are run by the government. Fannie has received $60.9 billion of direct government support while Freddie has received another $51.7 billion. That is over $111 billion, way more than any bank has received. This $111 billion represents 4 times what is left to be paid in TARP money by the banks.


On top of the enormous aid provided, both Fannie and Freddie have had enormous losses. Fannie reported a fourth-quarter loss of $16.3 billion, including $1.2 billion in dividend payments to the Treasury Department which was down from the $25.2 billion they lost a year earlier and the $19.8 billion they lost in the third quarter. For 2009, Fannie's losses totaled $74.4 billion, compared with $59.8 billion in 2008.

The news at the much smaller Freddy Mac is not much better. Freddie reported a fourth-quarter loss of $7.8 billion, compared to a loss of $23.9 billion a year earlier. They lost $21.6 billion for all of 2009 which was an improvement over the $50.1 billion they lost in 2008.

So in essence, we the taxpayers, had to fund another $100 billion for Fannie and Freddie to cover their losses. Oh did anyone mention that the top brass at Fannie and Freddie got cash compensation in excess of $6 million. If this were a CEO at a bank you can be sure it would have been page 1 news.

To use Mr. Obama’s own words, We Want Our Money Back!! What is the plan to get the $100 billion back from Fannie and Freddie? What about the $174 billion still outstanding to all the non-banks?