More Losses Expected for Fannie and Freddie
By Elizabeth MacDonald
As the one-year anniversary of the housing and credit crunch approaches, investors in Fannie Mae and Freddie Mac have nothing to celebrate. They won’t see an end to the losses at these mortgage finance giants until after next year.
Moreover, a report from the regulator of the two mortgage finance giants gives embarrassing new detail on how Fannie and Freddie were mindlessly gunning the securitization engines well after the housing bubble had burst and Wall Street backed off.
Freddie Mac will report its second-quarter financial results Wednesday. Fannie Mae will release its results on Friday. Freddie Mac’s shares are down 88% this year, while Fannie’s shares have dropped 83%. More losses and writedowns for the two are likely on the way.