Freddie Mac has posted an eye-popping $8 billion first-quarterloss -- an amount higher than the $7.8 billion that Freddie lost inQ4 2009. The GSE will be seeking more funding from the government.In the short run it will likely get it. The Obama Administrationhas all but said the sky's the limit for keeping Fannie and Freddiesolvent. There is a case to be made for that - certainlymultifamily companies like that position. However the numbers alsobolster a case being made by some Republicans that it is time tocut the cord for Fannie and Freddie. Unfortunately, they may be theright -- the government's support of the two GSEs in the long runis not sustainable. It is also hindering private market solutions,such as a multifamily CMBS. Given the strong constituency thatwants to keep the status quo with the GSEs - at least, again formultifamily - the situation is not likely to change any time soon.Including the GSE's bleeding red ink.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
