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Whoops. Fannie May last week posted a $15.2-billion second quarter loss. And now they say they need $10.7 billion to stem the bleeding.
Pollyannas in the press keep trying to cheerlead the economy back to life, but it isn’t working–especially the housing market. Perhaps if the execs at Fannie Mae would read the New York Times, they’d discover that all the piddling little inducements the Obama administration has proposed don’t even begin to equal the fees mortage and title companies collect when they foreclose on a house.
The crux of the matter from the Times article:
“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said.