Even after receiving bailout funds from the government, real estate giants Fannie Mae and Freddie Mac are still in dire need of more cash citing that they are facing “critical” financial problems. The companies are strapped down from weaknesses in financial and operational concerns.
The situation, as cited by a report of the Federal Housing Finance Agency, stresses concluded that the companies’ operations will not be possible without government help.
The report states, “With new senior management teams, each enterprise has made strides in remediating problems. But they still face numerous significant challenges including building and retaining staff and correcting operational and credit management weaknesses that led to conservatorship.”
Fannie and Freddie are vital to any hopes of a housing recovery. Taken over by the government last September, the companies are critical components to Washington’s foreclosure prevention plan.
To continue functioning, the firms have drawn down about $60 billion of their combined $400 billion lifeline from the federal government. Fannie reported a $23.2 billion quarterly loss and Freddie a $9.9 billion quarterly loss earlier this month.
Source: CNN
