AIG, Fannie Mae, Freddie Mac and GMAC – all entangled in the country's mortgage mess – are in no position to repay their government loans and may even need additional cash infusions to stay afloat, according to a New York Times report Thursday.
All four companies guaranteed mortgages and remain exposed to enormous risk as the defaults continue at record levels. And they have either recently drawn more money from the government or appear ready to do so.
Specifically, according to the Times:
• Fannie and Freddie have used $112 billion of the $400 billion promised by the Treasury Department. They are in talks to double the funds available to them - $400 billion each – according to people familiar with the negotiations.
• GMAC, which has received $13.4 billion in TARP funds, is looking for an additional $5.6 billion because of continued weakness.
• AIG took an additional $2 billion from a $30 billion government loan facility after the original $40 billion rescue package wasn't enough.
All told, the $600 billion dollars reserved for these four companies drastically exceeds the total government money pumped into the banking industry - $245 billion, of which $185 has been repaid or is expected to be.
And if Fannie and Freddie are given extra funding, the taxpayer bailout would balloon to $1 trillion.