The housing market continues to rack up losses for investors who have purchased stock in any company relating to the housing industry. The latest company to post a staggering first quarter loss of over two billion was Fannie Mae, a semi government regulated company that securitizes mortgage backed securities. Fannie Mae like most companies is under enormous strain from the rapid decline in the real estate market and the number of foreclosed homes that continue to pile up. The company announced a plan to reduce its dividend and raise and additional six billion dollars of capital to help balance its operating portfolio. Fannie Mae is now in the market to begin purchasing jumbo loans as the government is clearly relying on their ability to purchase more loans and help ease the credit crisis. Many legislators are growing concerned that the company is taking on too much debt and could force the government to step in and bail the company out if the housing market does not rebound in the next twenty four months. Oddly, the stock finished up almost ten percent in trading on the news.

5-6-2008©LowRateMortgage.com

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