It's that time of the year, when winter starts fading, college basketball becomes relevant, and the GSEs release their annual earning loss statements. First up, Fannie Mae.
In the fourth quarter of 2011, Fannie Mae lost $2.4 billion, and is asking the Treasury Department (aka the taxpayer all-you-can-take bailout buffet) for $4.6 billion to stay solvent. Without this money Fannie Mae would be bankrupt, but the Treasury Department has already committed to cover any losses (as we have since late 2008).
Overall In 2011, Fannie Mae lost a net of $16.4 billion, after losing a net of $10.6 billion in 2010. And combining bailout request for all four quarters, Fannie Mae is going to take in $26 billion in bailouts for 2011, after getting $15 billion in bailouts for 2010.
So the new complete taxpayer bailout total for Fannie Mae (3Q2008 through 4Q2011):
To put this in perspective, Bank of America and Citigroup each received $45 billion in bailout funds (through TARP capital injections), but have since paid them all back. J.P. Morgan Chase and Wells Fargo each received $25 billion in bailouts but have also paid back their funds. General Motors got $51 billion in bailouts, but has paid back more than half of it as of this writing.
The only close comparison is AIG—which has received loans and capital injections of $140 billion, which is slowly being repaid.
Once you combine Fannie's losses with Freddie Mac ($71.2 billion as of 3Q2011), you get current total bailout expenses of $187.4 billion. And we haven't even seen Freddie's 2011 loss statement yet.
HousingWire further reports: "The problem loans continue to rise from the books of business originated between 2005 and 2008. These loans cost Fannie $140 billion since 2009. Its becoming a smaller portion of the entire portfolio, though, shrinking to 31% at the end of 2011 from 39% the year before."
We do not have to continue bailing out these enterprises. We can put them into receivership and begin the process of winding down their activities over a five year period.
Here is an updated list of Fannie Mae's quarter bailout needs:
- 4Q 2011 — $4.6B
- 3Q 2011 — $7.8B
- 2Q 2011 — $5.1B
- 1Q 2011 — $8.5B
- 4Q 2010 — $2.6B
- 3Q 2010 — $2.5B
- 2Q 2010 — $1.5B
- 1Q 2010 — $8.4B
- 4Q 2009 — $15.3B
- 3Q 2009 — $15B
- 2Q 2009 — $10.7B
- 1Q 2009 — $19B
- 4Q 2008 — $15.2B
- 3Q 2008 — $0B
See last quarter's post on Fannie Mae's losses here.
See full coverage of Fannie Mae and Freddie Mac here.