Just how Broke is Fannie Mae?

[thunderdownunder]

You COULD NOT put spin on this - is very disturbing.
You need urgently to go through all the books with some resemblance of Truth in accounting - the Fed, freddie ,fannie, and FIDC.
http://www.sec.gov/Archives/edgar/da...148exv99w1.htm

WASHINGTON, DC – Fannie Mae (FNM/NYSE) reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. Including $883 million of dividends on our senior preferred stock held by the U.S. Department of Treasury, the net loss attributable to common stockholders was $19.8 billion, or ($3.47) per diluted share, in the third quarter of 2009, compared with a loss of $15.2 billion, or ($2.67) per diluted share, in the second quarter of 2009. Third-quarter results were largely due to $22.0 billion of credit-related expenses, reflecting the continued build of the company’s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage-backed securities trusts in order to pursue loan modifications.

The loss resulted in a net worth deficit of $15.0 billion as of September 30, 2009, taking into account unrealized gains on available-for-sale securities during the third quarter. As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company’s behalf. FHFA has requested that Treasury provide the funds on or prior to December 31, 2009...................................

Back to the swine trough

Net Worth and U.S. Treasury Funding
We had a net worth deficit of $15.0 billion as of September 30, 2009. As noted above, the Acting Director of FHFA has requested $15.0 billion of funds from Treasury on our behalf under the terms of the senior preferred stock purchase agreement between Fannie Mae and Treasury to eliminate our net worth deficit as of September 30, 2009. On September 30, 2009, Treasury provided to us $10.7 billion under the terms of the senior preferred stock purchase agreement to cure our net worth deficit as of June 30, 2009. As a result of this draw, the aggregate liquidation preference of the senior preferred stock increased from $35.2 billion to $45.9 billion as of September 30, 2009. It will increase to $60.9 billion upon the receipt of funds from Treasury to eliminate our third-quarter 2009 net worth deficit. We expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury pursuant to the senior preferred stock purchase agreement.

[metalman]

Re: Just how Broke is Fannie Mae?

just another scam down the memory hole... remember this one?

Private Investors to Buy Sallie Mae for $25 Billion

By David S. Hilzenrath and Amit R. Paley
Washington Post Staff Writers
Tuesday, April 17, 2007

Sallie Mae, the nation's largest student loan company, announced yesterday that it would be bought by a group of private investors in a $25 billion deal that could reduce public scrutiny of the lender at a time when the student loan industry is under siege.

The enormous deal underscores the potential for profit that Wall Street sees in the $85 billion-a-year student loan industry, even as Congress considers slashing billions of dollars in federal loan subsidies and an expanding nationwide probe reveals fresh conflicts of interest in the student lending world.

The buyers of the Reston company include J.P. Morgan Chase, the third-largest originator of federal student loans, and Bank of America, the fourth-largest. Together with Sallie Mae, they control up to 40 percent of the market, analysts said.

The sale -- which could triple the value of the chief executive's stock options, to more than $120 million -- is the latest transformation for a 35-year-old company that began as a congressionally chartered quasi-governmental entity. Sallie Mae has capitalized on rising tuition costs and increased enrollments at colleges and universities to become a financial powerhouse and one of the largest public companies in the Washington area.

and then...

Sallie Mae Deal Thrown Into Question

Buyers Balk at Subsidy Cut, But Some Call It Posturing
By Thomas Heath and Amit R. Paley
Washington Post Staff Writers
Thursday, July 12, 2007

An alliance of financial firms planning to acquire Sallie Mae has told the student loan company that legislation passed yesterday in the House could hurt its business and scuttle the proposed $25 billion deal.

Some analysts and one congressman questioned whether the buyers were using the warning as a negotiation tactic to get a better price for the Reston company, formally known as SLM. A source close to the buyers said that was part of the motivation. The source spoke on the condition that he remain anonymous because he was not authorized to speak about the deal.

and then...

Consortium offers to cancel Sallie Mae deal

The banking consortium that previously agreed to buy Sallie Mae for $25 billion has sent a letter to a Delaware court proposing to cancel the deal.
The letter is in response to Sallie Mae's claim that the deal is impeding its ability to run its business.

Last week, Sallie Mae petitioned the Delaware Chancery Court to expedite its lawsuit against the group, which includes Charlotte-based Bank of America Corp. (NYSE:BAC), J.C. Flowers & Co. and JPMorgan Chase & Co. (NYSE:JPM).

On April 16, the investor group agreed to buy Virginia-based Sallie Mae, formerly known as SLM Corp., for $60 per share in cash.

and then..

Sallie Mae Deal Called Off in the Face of Subsidy Cuts
By MARTIN VAN DER WERF

A $25-billion takeover of Sallie Mae that was announced in April was called off last week, the victim of a new law that will cut federal subsidies to student-loan providers.

President Bush signed the law, the College Cost Reduction and Access Act of 2007 (HR 2669), last week. Among other things, the law will cut subsidies to for-profit lenders by 0.55 percent. It is the second cut in federal subsidies to student lenders in the last two years.

maybe we all stop paying our taxes.