Now How Much Would You Pay for Inflated Real Estate?

In case you missed it earlier today, Freddie Mac is back with another quarterly money request. This time the failed mortgage buyer is letting us off relatively easily, demanding a mere $1.8 billion -- really, the kind of change you find just looking in the cushions -- to cover its second-quarter losses:

Freddie Mac said Monday it lost $6 billion, or $1.85 per share, in the April-to-June period. The company is required to pay a 10 percent annual dividend to the Treasury Department on money it has received from the government. That made up $1.3 billion of the company's second-quarter losses.

Last week Freddie Mac's special-needs sister Fannie Mae hit us up for an additional $1.5 billion, having lost a cool $3.13 billion in Q2. As we noted last time the former GSEs needed new handouts, the bad news is that this is the good news. The mortgage giants continue to take on more questionable debt (which, for the umpteenth time, is actually the opposite of what you're supposed to do when you're overextended), and the only bright spot here is that they have been on a trend to request a little less to cover their losses each quarter:

That compares with an $8.0 billion loss in the prior quarter and is the best three-month performance in a year. The firm lost $840 million in the second quarter of last year.

The company said losses stemmed primarily from loans purchased or guaranteed between 2005 and 2008.

The U.S. Treasury took control of Freddie Mac and its sister entity, Fannie Mae , at the height of the financial crisis in 2008 as loan losses mounted.

Since the government takeover, the two firms together have requested close to $150 billion from the government's unlimited credit line, scheduled to expire at the end of 2012.

Once again, the outright taking of taxpayer money is less bad than what the GSEs are doing with it -- continuing to underwrite artificially low interest rates for buyers with insufficient equity stakes, thus encouraging Americans to buy more house than they can afford. That's what got us into this mess, according to the president -- but only on Mondays, Wednesdays and Fridays. Tuesdays, Thursdays and Saturdays the problem is that people who work hard and play by the rules can't get a loan.