Thursday November 5, 11:53 PM
Fannie Mae seeks $15 bln in aid after loss
WASHINGTON (AFP) - US state-controlled mortgage lender Fannie Mae (NYSE: FNM - news) posted Thursday another multibillion-dollar quarterly loss and said it needed an additional 15 billion dollars in taxpayer funds.
Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter, 35 percent smaller than a year ago but sharply higher than its 14.8-billion-dollar loss in the second quarter.
Combined losses to date stand at 56.8 billion dollars.
Fannie Mae said the third-quarter results were largely due to 22.0 billion dollars of credit-related expenses, "reflecting the continued build of the company?s combined loss reserves and fair-value losses."
It attributed the losses to "the increasing number of loans that were acquired from mortgage-backed securities trusts in order to pursue loan modifications."
The bailed-out lender has been buying mortgage-backed securities whose value has soured, part of the government's efforts to support the ailing housing market after a price bubble collapsed in 2006.
Fannie Mae said that at the end of the third quarter the company was in the hole for 15 billion dollars, and as a result had turned to the Treasury Department on Wednesday to seek public funds to keep it operating.
"The acting director of the Federal Housing Finance Agency submitted a request for 15.0 billion dollars from Treasury on the company?s behalf. FHFA has requested that Treasury provide the funds on or prior to December 31."
Fannie Mae and its fellow state-controlled mortgage lender Freddie Mac (NYSE: FRE - news) have already received hundreds of billions of dollars as part of a government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
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