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HUD secretary, Congress debate foreclosure plans.Fannie Mae seeks government cash after 25-billion-dollar loss
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This is the first time Fannie Mae has asked for government money, but the Treasury Department last week said it is doubling the lifeline for the Fannie Mae and Freddie Mac to $200 billion each.
The two mortgage finance companies, which were seized by the government last September, own or back about half of the nation's mortgage loans.
Foreclosures also were an issue in the House, where an expected vote on a housing relief plan was delayed. Democrats were at a stalemate over a measure that would allow bankruptcy court judges to reduce the principal and interest rate on mortgages for homeowners saddled with heavy debt.
The vote was derailed after a group of moderate Democrats expressed concerns about how the bill would affect homeowners who are not facing bankruptcy but are still struggling to make their mortgage payments.
Consumer advocates and most Democrats regard the measure as crucial, claiming it's the only way to force loan servicers to take steps to help homeowners stay in their homes. Most of the mortgage industry remains ardently opposed, and has been fighting to block the proposal.
House leaders postponed a vote until Tuesday to give Democrats time to meet with Donovan about how the measure fits with the Obama administration's housing plan. The Senate is expected to take up the legislation within two weeks.
In the Senate, Democrats praised the Obama administration's plan to spend $75 billion from the $700 billion financial bailout fund to keep up to 4 million U.S. homeowners out of foreclosure.
But a prominent Republican, Sen. Richard Shelby of Alabama, was skeptical. He countered that subsidies will go to the same major lenders already receiving billions in taxpayer bailout money.
The administration's plans are "a further bailout to the very banks that helped us get into our current situation," Shelby said.
The delayed House vote and Senate bickering came amid more disquieting news for the housing market.
The Commerce Department reported Thursday that new home sales fell 10.2 percent to a seasonally adjusted annual rate of 309,000, the worst showing on records going back to 1963. It also was weaker than economists expected, and shattered the previous all-time monthly low set in September 1981.
The median sales price fell to $201,100 in January, a record 9.9 percent drop from the previous month. The median price is the midpoint, where half sell for more and half for less.
Lower prices, coupled with low mortgage rates, have helped restore affordability in some once-heated markets, but potential homebuyers are still wary.
The average rate for 30-year fixed mortgages this week was 5.07 percent, up slightly from 5.04 percent last week, but still near historic lows, Freddie Mac reported Thursday.
"Lower house prices and affordable mortgage rates have yet to spur housing demand," Frank Nothaft, Freddie Mac's chief economist, said in a prepared statement.
Adrian Sainz reported from Miami. Associated Press writers Julie Hirschfeld Davis and Jeannine Aversa contributed from Washington.
by Marina Dimova on Fri, 02/27/2009 found at visitbulgaria.info
US mortgage giant Fannie Mae reported a 25.2- billion-dollar quarterly loss on Thursday and asked the government for cash to keep it afloat.
Fannie Mae asked for a 15.2-billion-dollar capital infusion from the US Treasury and said it could need more if the housing and credit markets continue to worsen.
It was the sixth-straight quarterly loss for the lender that was taken over by the government last year. Losses for the year came to 58.7 billion dollars.
In 2007, Fannie Mae had 3.6 billion dollars in fourth quarter losses and yearly earnings of 2.1 billion dollars.
The company had said last month it would seek the cash infusion in its first withdrawal under a programme established last year to keep it and its sibling Freddie Mac afloat.
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.
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