Fannie Mae Posts $2.9 Billion Loss, Needs Another $5.1 Billion Bailout Funds
WASHINGTON – Fannie Mae this morning reported deteriorating mortgage markets pushed its second quarter losses to $2.9 billion, which will necessitate another $5.1 billion in government assistance.
Including preferred-dividend payments to the Treasury Department, the loss was $5.18 billion.
The new bailout request brings to $104 billion the amount of government funds that will be pumped into the secondary mortgage market giant since it and its sister Freddie Mac were taken over by the government in September 2008.
The second-quarter loss "reflects the continued weakness in the housing and mortgage markets, which remain under pressure from high levels of unemployment, underemployment and the prolonged decline in home prices since their peak in the third quarter of 2006,” said Fannie Mae.
Expenses related to mortgage modifications also contributed to its loss in the quarter. "Fannie Mae expects its credit-related expenses to remain elevated in 2011 due to these factors," the company said.
The $2.9 billion loss follows a loss of $6.5 billion in the first quarter and compared with a loss of $3.1 billion in the second quarter of 2010.
Fannie reported a loss of $9.4 billion for the first six months of the fiscal year.