Fannie Mae, the Federal National Mortgage Association, despite improving finances, says it has asked the U.S. Treasury Department for an additional $1.5 billion loan. The giant mortgage broker lost $1.2 billion in the second quarter and shelled out $1.9 billion in dividends to the department, The Hill newspaper reported Friday.That's a sizable improvement from the first quarter, when Fannie Mae lost $11.5 billion. But Fannie Mae, already in hock to the government for $84.6 billion, "does not expect to earn profits in excess of its annual dividend obligation to Treasury for the indefinite future," it said in a statement.Fannie Mae and the Federal Home Loan Mortgage Corp., known as Freddie Mac, fell into government conservatorship in the fall of 2008 after suffering huge losses in the housing market collapse that had begun at least a year earlier. Meanwhile, The White House and Congress are set to overhaul the $12 trillion U.S. mortgage market and decide the fate of Fannie Mae and Freddie Mac, observers say. The effort has sparked debate along party lines over how much the federal government should support home ownership, The Washington Post reported. Fannie and Freddie, which guarantee nearly all new home mortgages, were bailed out by the federal government for $160 billion amid the mortgage crisis.Affordable housing advocates want the government to offer more support for rental housing rather than pushing for home ownership for low-income people But Republicans have proposed legislation to shut down Fannie and Freddie and some want no government support for housing. They say the government push for home ownership led to banks' approving risky loans to borrowers with poor credit.
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