Fannie Mae Seeking 1.5 Billion In Aid- Less Than Expected

August 5, 2010, 7:21 PM

Fannie Mae (OTC BB: FNMA.OB) reported a net loss in the second quarter of only 1.2 billion, compared to a net loss of 11.5 billion dollars during the previous quarter. This is the mortgage giant’s smallest quarterly loss in three years.

Although the company is making improvements, they still require another 1.5 billion dollars in federal aid. Fannie Mae Chief Executive Mike Williams believes the improvements are from the company’s new conservative approach.

“We are focused on sustainable home ownership, and our higher underwriting and eligibility standards reflect that,” said Williams in a statement. “Across our industry, we are seeing a more realistic approach to housing and lending that bodes well for the future.”

The company so far has received a total of 85 billion dollars in federal aid, and it asked for another 1.5 billion dollars to keep afloat.  Aside from Fannie Mae, the government distributed 61 billion dollars as aid into Freddie Mac to keep them from drowning during the financial meltdown.

Both mortgage companies are controlled by the federal government, which owns or guarantees half of all U.S. mortgages.

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Tags: Fannie Mae, Federal Aid, Federal Bail out, penny stocks