According to the Wall Street Journal, last year Fannie Mae lost 35 cents on every dollar of debt that went through foreclosure. As of a few weeks ago the average underwater mortgage (mortgage where the borrower owes more than the home is worth) on homes worth less than $250K* was underwater by about $70K. If Fannie Mae had helped homeowners by cutting the balance owed by that average underwater amount Fannie would have taken a 30% hit instead of the 35% hit they recorded and homeowners would be in a much better position. Of course, if Fannie Mae helped homeowners they wouldn’t be in a position to auction off to their business partners $320 million worth of foreclosed homes in bulk.
*Might’ve been $300K, memory is failing me right now.