US mortgage giant Fannie Mae reported second quarter losses of $15.2 billion and has requested the Treasury for a further aid of $10.7 billion. The loss this quarter is comparatively lesser than the $23.2 billion it had lost in the previous quarter.
This will be the third occasion in recent months that Fannie Mae has asked for government aid. In March, it had received $15.2 billion in aid from the government. Funds of $200 billion each have been made available to Fannie Mae and fellow mortgage firm Freddie Mac.
Losses in loans due to the weakening housing market conditions and rising unemployment stacked up to $18.8 billion. According to Fannie Mae, almost 4% of the loans owned or guaranteed by it were in arrears up to 30 June, an increase of 2.6% over the previous year.
The US treasury has shelled out $96 billion to cater to the requests made by Fannie and Freddie, both of whom have been in crisis since lowering their criteria for sub-prime borrowers during the housing boom. The US government will reveal its plans for the mortgage giants next year which may range from winding up the companies to merging them with a government agency.
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