Fannie and Freddie Ask for $45 Billion

Fannie Mae and Freddie Mac are expected to ask the Federal government for at least $45 billion in the next few weeks so they can continue to operate despite increasing losses.

Rising delinquencies and falling values of bonds cause the need for the cash infusion.

Freddie Mac is likely to be the hardest hit. It said late last week that it would probably have to seek $35 billion in capital from the Treasury.

Fannie Mae will probably need $10 billion, although it has been reported that it will ask for as much as $16 billion.

The losses underscore the need to break the downward spiral in the housing market, economists say.

Source: Reuters News, Al Yoon (01/26/09)