$25.2 Billion in 90 days?

That’s even worse than what General Motors did!   Yikes!

So what difference does that make?  Expect a couple of things:

1. The government is going to have to put more cash into Fannie (and probably Freddie).  This is going to increase government borrowings and put upward pressure on interest rates.
2. The lack of profitability at Fannie is going to discourage people from investing in mortgage backed securities and that’s going to put upward pressure on rates.
3. The continued losses at Fannie (and probably Freddie) is going to put upward pressure on fees associated with mortgages.

So, this not only isn’t a good thing for Fannie and Freddie, it doesn’t appear to be a good thing for those who want to take out a mortgage.

Fannie Mae Posts $25.2 Billion Fourth-Quarter Loss – WSJ.com

Fannie Mae reported late Thursday a $25.2 billion loss for the fourth quarter as the surge in mortgage defaults continued to drag down the nation’s largest supplier of funding for home loans.

The result compares with a year-earlier loss of $3.6 billion.

Fannie and Freddie