Massive Losses at Fannie Mae

Government-controlled Fannie Mae, one of the key institutions behind the effort to return stability to the U.S. housing market, posted a $25.2 billion fourth-quarter net loss today. The loss was seven times that of its fourth-quarter loss a year ago. As a result, Fannie Mae’s regulator asked the U.S. Treasury for $15.2 billion. Just last week, The White House moved to boost confidence in the two companies by doubling Treasury capital backstops to $200 billion each. Their equity has all but vanished, and the government has said it will support the debt issuance with an effective guaranty.