Let's look at the numbers. Fannie Mae needs $19 billion. Match this against a loss of $23.2 billion and you have a net worth below zero.
That's not the end of it. Fannie Mae (NYSE: FNM)is expected to need more money going forward, drawing on the government to supply the funds. Now some of this has been brought on by the government itself when it made Fannie program administrator for the government's housing market rescue.
Fannie suffered a net loss of $4.09 per share, which forced it to draw upon a $200 billion federal lifeline which was established for Fannie and Freddie.
Here's a breakdown of Fannie's losses. $20.9 billion came from credit costs, $1.5 billion was from plunging value of its portfolio, and $5.7 billion of "securities impairments", whatever that means.
Fannie did however, sell $15.2 billion of preferred stock to the US Treasury, which wiped out its fourth quarter loss.
Fannie and Freddie own or guarantee almost half of US residential mortgage debt and are the central players in President Obama's housing rescue program.
So far, Freddie (Federal Home Loan Mortgage Corp (NYSE: FRE)) has drawn $45.6 billion from the US Treasury and has not yet reported first quarter results. Freddie too may need more money from the Treasury.
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