<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Deborah Solomon</p> <p>Fannie Mae is back at the government trough, <a href="http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2011/q42011_release.pdf">asking U.S. taxpayers</a> for another $4.6 billion to help the mortgage giant stomach a $2.4 billion quarterly loss -- and intimating it may need more down the road.</p> <p>With this latest request, Fannie Mae and its sister firm, Freddie Mac, will have borrowed about $188 billion since the two were taken over by the U.S. in 2008. The eye-popping amount will surely renew calls for the U.S. to finally show Fannie and Freddie the door.</p> <p>But the mortgage market is so incredibly weak, and so reliant on the two companies, that the day of reckoning is probably a long way off. Private issuance of mortgage-backed securities -- a type of bond used to finance real-estate loans -- is down more than 99 percent since its peak before the financial crisis, according to a Bloomberg analysis.</p> <p>There's no shortage of <a title="Administration report" href="http://portal.hud.gov/hudportal/documents/huddoc?id=housingfinmarketreform.pdf">ideas</a> about how to get Fannie and Freddie off the government dole: Privatize! Shrink their portfolios! Shut them down! But the uncomfortable truth is the companies, which account for about 60 percent of all outstanding mortgages, are critical to a functioning housing market. Without them -- or with a smaller version of them -- an already tight credit situation would get tighter still, leaving millions of borrowers unable to get home loans.</p> <p>At a time when housing is weighing down the broader recovery it's unlikely -- and unwise -- to neuter the two things that are keeping the housing market from slipping into an even deeper abyss.</p> <p>(Deborah Solomon is a member of the Bloomberg View editorial board. <a href="https://twitter.com/#!/deborah_solomon">Follow</a> her on Twitter.)</p> <p>For more quick commentary from Bloomberg View, go to <a href="http://www.bloomberg.com/view/the-ticker/">the Ticker</a>.</p> </body> </html>