Fannie & Freddie

Fannie Mae, Freddie Mac and FHA all continue to bleed tons of red ink. Fannie is the largest and recently tapped their unlimited government credit card for another $15.3 billion - the 10th straight quarterly loss. For the whole of 2009 the loss was $74.4 billion - about $200 million per day! These entities, chartered by the government to provide liquidity to the home mortgage market have become perhaps the single largest "time bomb" in the financial sector. The borrowings from the government are "off balance sheet" and therefore not considered part of the collective federal debt numbers that are repeated now with frequency. Yet , even a cursory glance at government bonds in the financial pages show these as government obligations. The companies have a huge negative net worth but guarantee over $5 trillion of mortgages. They have become corrupt political pawns that no one fully understands.