Fannie Mae, the giant mortgage company under federal control, is to ask for up to 16 billion dollars in federal money to stem massive losses from the mortgage default crisis, it said on Monday.
The request for an estimated 11 billion to 16 billion dollars aims to keep the largest source of US home loan funding alive, and would be its first withdrawal under a programme established last year to keep it and Freddie Mac afloat. The action came in response to an initial look at its fourth quarter financial picture, Washington- based Fannie said.
Freddie Mac on Friday asked for another tranche of 35 billion dollars in federal money after already taking 13.8 billion dollars from the US Treasury Department in November, dpa reported.
Treasury officials have pledged up to 100 billion dollars each for Freddie Mac and Fannie Mae. Both are government-chartered firms which finance or buy half of all the nation's mortgages, estimated at 12 trillion dollars.
In September, the US government seized control of Fannie Mae and Freddie Mac and replaced their executives as the US financial crisis came to a head. It also set up a fund to keep the mortgage giants solvent and has since provided bail-outs to some of the country's largest financial firms and automakers.
The US mortgage crisis spurred by sub-prime loans to borrowers with poor credit is blamed for sending the country's financial institutions into a tailspin which then drove the economy into a recession.