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Fannie Needs $16 Billion From Treasury

"Fannie Mae":http://www.fanniemae.com will need as much as $16 billion from the Treasury Department to avoid posting a loss in the fourth quarter of 2008, according to an "Securities and Exchange Commission":http://sec.gov filing.
The announcement comes just days after "Freddie Mac":http://www.freddiemac.com filed a similar report indicating it would as for as much as $35 billion to keep it solvent.
The Federal Housing Finance Agency (FHFA), as conservator of Fannie and Freddie, can request the funds from a $100 billion senior preferred stock purchase agreement the FHFA made with the U.S. Treasury Department on behalf of the two mortgage companies.
The request comes after unaudited preliminary financial statements Fannie Mae is preparing in anticipation of its fourth quarter report. Since the money needed is only a preliminary estimate, Fannie Mae may change the amount of the request.
Freddie Mac received $13.8 billion from the purchase agreement in November, but this is the first time Fannie Mae has needed to ask the Treasury for an influx of cash.

About Author: Austin Kilgore


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