Fannie Mae asks for $7.8 billion more from taxpayers

Government-sponsored lender Fannie Mae recently reported heightened losses in the third quarter of 2011, and is asking the federal government and taxpayers for an additional $7.8 billion to cover these deficits. Fannie Mae lost $7.6 billion between July and September 2011 due to reduced profits from low mortgage rates and declining home prices that pushed more borrowers to default on their loans.

The federal government has already spent $169 billion of taxpayer money on rescuing Fannie Mae and Freddie Mac during the 2008 financial crisis, the most expensive bailout, and officials predict the total aid given to the lenders could reach $220 billion by 2014 after subtracting dividend payments.

With the financial stability of Fannie Mae and Freddie Mac in the spotlight, congressional Democrats are calling for the Federal Housing Finance Agency, which oversees the lenders, to explain executive bonuses at the agencies. Democrats want acting FHFA director Edward DeMarco to answer questions regarding the bonuses he approved while the lenders experienced significant losses, The Hill reported.

In 2010, the FHFA approved $12.79 million in bonus compensation for 10 Fannie Mae and Freddie Mac executives, and earlier this year the FHFA's inspector general said the agency lacks any control over the lenders' compensation decisions. The House Oversight and Government Reform Committee wants to hear from DeMarco as to why these bonuses were approved, the source reported.

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