Fannie Mae's quarterly loss shrunk to $1.2 billion. But even as signs point the pressures on Fannie may be easing, it still asked the government for an additional $1.5 billion cash infusion. Fannie Mae and Freddie Mac insured nine of ten new loans in the first quarter.

Fannie Mae's story is the story of the housing debacle. Fannie Mae, and its companion Freddie Mac, are used to insure home mortgages backed by the U.S. government. During the heyday of the housing bubble, Fannie and Freddie ended up guaranteeing risky mortgages. When the subprime mortgage crisis hit, Fannie and Freddie came close to collapsing. The federal government took them over under a process called conservatorship.

Fannie Mae (FNM) announced Wednesday it told the Securities and Exchange Commission that it will delist its common and preferred stock. On Tuesday, the company was told that it no longer meets NYSE listing standards of minimum price of its common stock. Shares of FNM have traded below a $1 average price for the past 30 days, triggering NYSE rules for the company to either take action to boost its shares or to delist.

But it wasn't just the exchange's rules and regulations. The Federal Housing Finance Agency announced that it is directing both FNM and Freddie Mac (FRE) to delist their shares from the NYSE and any other national exchange.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• American International Group Inc. (AIG) said its Q1 earnings doubled, easily topping analysts' expectations.
• Cablevision Systems Corp. (CVC) said Q1 revenue grew, but disappointing earnings dragged down shares.
• Chevron Corp. (CVX) had strong Q1 earnings and boosted its dividend, but Gulf spill concerns weighed on shares.
• CVS Caremark Corp. (CVS) Q1 earnings topped consensus estimates but it also said same-store sales slipped.
• Freddie Mac (FRE) said its lost $8 billion in Q1, less than a year ago, and requested further bailout funds.

Do you remember Freddie Mac (FRE)? This is a story for the record books. For years it was difficult to get a handle on Freddie's finances. When the meltdown occurred, Freddie was forced to bring $1.5 trillion onto its balance sheet. In one stroke of the pen this caused Freddie's net worth to plunge $11.7 billion.

With the $1.5 trillion on its books, Freddie has been showing losses. In the recent quarter, Freddie lost $8 billion, or $2.45 per share. That compares with a loss of $10.4 billion or $3.18 per share in the first quarter. This takes into account $1.3 billion in dividends paid to the Treasury Department.

Late Wednesday, Fannie Mae (FNM) confessed that delinquencies on loans in its single-family guarantee business increased to 5.38% in December, marking a steep increase from 2.42% in December 2008. The multifamily delinquency rate arrived at 0.63% for the final month of 2009, compared to 0.30% in December 2008.

Additionally, Fannie Mae reported that its mortgage investment portfolio contracted by 44.8% to $735.2 billion in January

Chairman of the House Financial Services Committee Barney Frank said Friday at a hearing on executive compensation issues: "I believe this committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance."

This represents a turnaround for Representative Frank (D., Mass.), who has been a staunch supporter of Fannie Mae and Freddie Mac.

The Federal Reserve picked up a $52.1 billion profit last year, a record for the organization. The result is due largely to its 2009 bailout efforts. Of the profit generated, $46.1 billion will be handed over to the Treasury Department -- the largest profit payment made since records began back in 1914. The previous record was $34.6 billion, in 2007. Last year, the Fed turned $31.7 billion over to the Treasury Department.

According to the Associated Press, the profit didn't come from the $700 billion lent to financial institutions -- and then to auto companies like General Motors. Rather, it was the result of earnings from the securities it had in its portfolio last year. Several investment programs were launched last year to help kickstart the U.S. economy and drive down rates on mortgages and consumer debt. Through the programs, the Fed bought $300 billion in government debt, and under another, it's on a trajectory to buy $1.25 trillion in Freddie Mac and Fannie Mae mortgage securities.

'Tis the season to be greedy! Fannie Mae (FNM) CEO, Michael Williams, and Freddie Mac (FRE) CEO, Charles Halderman, will each receive $6 million in total compensation for 2009!

How would you like to work for a company that will guarantee every single loss you have. The U.S. Treasury said that they would absorb all losses for Fannie and Freddie for the next three years, if necessary.

Freddie Mac has a new CEO CFO and his name is Ross Kari. Can you guess his compensation? Is it reasonable in light of the fact that Freddie Mac is controlled by the government?

In these days when we have 5.4 million people who have been on unemployment for at least six months, Kari's compensation is $5.5 million, which includes $2 million as a signing on bonus and a generous salary of $2.3 million.

If you're wondering why Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have been bombarded by selling pressure today, look no further than this Wall Street Journal article (subscription required). The newspaper reports that the Mortgage Bankers Association (MBA) is pushing for the government to split up Fannie and Freddie "into several smaller privately held companies that would issue mortgage related securities carrying an explicit government guarantee."

Under the terms of the proposal, Fannie and Freddie's offspring would no longer be permitted to sit on massive mortgage portfolios. Additionally, all mortgage-backed securities created by the duo would be backed by a federal insurance fund, replacing the rather abstract implied government guarantee that's currently in place.

TheStreet.com's Jim Cramer says the bizarre rules these days make it worth looking at stocks through a different lens.

How much should we care about low-dollar speculation? How much should we care about the incessant trading in CIT (NYSE: CIT) (Cramer's Take) and Fannie Mae (NYSE: FNM) (Cramer's Take), Alcatel-Lucent (NYSE: ALU) (Cramer's Take), or Vonage (NYSE: VG) (Cramer's Take) and Sprint (NYSE: S) (Cramer's Take)? Or even Citigroup (NYSE: C) (Cramer's Take)?

First, I have to tell you that I worry about it less than I used to. Why? Because when we used to have rules and government officials that were willing to speak the truth about stocks, we wouldn't have these single-digit players out there every day. But without it, how in heck can people not believe that Fannie and Freddie Mac (NYSE: FRE) (Cramer's Take) are the biggest and best bets on a turn in housing?

Fannie Mae (NYSE: FNM) closed at $1.86. FNM option volume was active on August 25 with 173,103 contracts trading. FNM overall option implied volatility is at 151.

Freddie Mac (NYSE: FRE) closed at $2.06. FRE option volume was active on August 25 with 53,469 contracts trading. FRE overall option implied volatility of 139 is near its four-month average of 138, according to Track Data.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Earlier today, Colonial BancGroup (NYSE: CNB) fell nearly 12% to 41 cents per share before trading was halted pending a news announcement. As it turns out, the troubled bank is being taken into receivership by the Federal Deposit Insurance Corp. (FDIC), while BB&T Corporation (NYSE: BBT) will acquire all of CNB's branches and deposits.

The announcement comes on the heels of a report in The Wall Street Journal (subscription required) that a federal judge has granted a temporary restraining order to freeze $1 billion of Colonial BancGroup's assets. The decision comes after Bank of America (NYSE: BAC) filed suit against CNB, seeking to protect its rights as trustee to $1 billion of loans received from Freddie Mac (NYSE: FRE). U.S. District Judge Adalberto Jordan ruled in Bank of America's favor, citing his concern that Colonial "is on the brink of collapse."

The government is in another pickle. Last September, Freddie and Fannie were effectively nationalized when the Fed stepped in and promised to buy $100 billion of preferred shares in each company and created warrants effectively diluting existing shareholder holdings.

Now the government finds that they have taken on a mountain of debt and wants out of this mess. According to the Washington Post, talks are underway to split the assets of the two companies along the lines of good bank/bad bank.

Outspoken congressman Barney Frank has no shortage of critics, and they're sure to be out in force today. This morning, The Wall Street Journal reported that the chairman of the House Financial Services Committee, along with his colleague Anthony Weiner, is actually recommending that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) relax their lending standards on condominiums.

The controversial request follows a decision by both Fannie and Freddie to tighten mortgage-lending standards for condos. In March, Fannie said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of units have been rented, up from its previous benchmark of 51%. Freddie is due to implement similar measures in July. In a letter to the CEOs of both mortgage lenders, Reps. Frank and Weiner expressed their concerns that the higher standard "may be too onerous," and asked the lenders to "make appropriate adjustments" to their approach.