FU GSE

(Via CJR)

Remember Freddie Mac and Fannie Mae? They'd be the Government Sponsored Entities who pretty much owned the secondary mortgage market until Wall Street went all Subprime.

It depends on what the definition of "lose" is...

You probably remember that these two companies were bailed out by the government to the tune of billions.
They almost went under because they were criminally under capitalized and couldn't absorb the cost of failing loans.

The Detroit Free Press is reporting that Freddie and Fannie are pressing foreclosures on these bad loans at a startlingly aggressive pace.

Foreclosure is generally agreed on as the worst case for all involved. The homeowner loses their home, the bank takes a home that is worth less than the loan it secured, and the house is unlikely to sell in a depressed and glutted market.

So why do it? Moreover, why fall all over yourself in a rush to do it?

This is why:

For example...if a home with a $200,000 mortgage is foreclosed and Fannie nets $80,000 from its sale, Fannie loses $120,000. But because Congress authorized the Treasury Department to reimburse Fannie as part of the government's takeover, taxpayers eat the losses.

The complete and utter scumbags who run the GSE, aided by those who would have the power to stop them, are hoping to bury the losses with federal funds and then return to their former glory days as a semi-private firm. A firm that presumably would resume paying them handsome salaries once all is forgotten by the public.