Fannie and Freddie Hiding Over $100 Billion of Losses?

Fannie and Freddie Hiding Over $100 Billion of Losses?

Given the prevalence of PMI insurance, their thin capitalization, and the big wipeout in home values, they should be as dead as the monolines. But they aren’t. That’s because they are engaging in insurance fraud, namely, refusing to pay out legitimate claims.


And perversely, as Whalen tells us, they are getting quite a bit of help from Fannie and Freddie not making claim at all. Why not? Well, if the GSEs did put in claims, the PMIs would quickly go bust and Fannie and Freddie would report losses. So the failure to put in claims is yet another variant of “extend and pretend”. But in this case, there’s good reason to believe the numbers are very large: