Fannie Mae Posts $3.1 Billion Loss

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WASHINGTON – Fannie Mae continued to hemorrhage red ink in the second quarter, reporting a $3.13 billion loss for the period yesterday – prompting a request for an additional $1.5 billion in taxpayer aid.

The second quarter loss follows a $13.1 billion loss for the first quarter and a $15.2 billion loss for the second quarter last year.

The new aid request makes a total of $147 billion in taxpayer funds that will be provided to Fannie Mae and Freddie Mac since they were taken under federal conservatorship in September 2008. The two companies, which own or guarantee about half of all single-family mortgages in the country, are critical partners for credit unions because they buy more than half of all credit union mortgages, providing key liquidity to the market.

The absence of a resolution on the two failed mortgage giants prompted Republican lawmakers in the House and Senate to mass against the recently passed financial reform bill. Congress has scheduled hearings on the two companies for the fall.

Credit-related costs, which include provisions for loan losses, provisions for losses on loan guarantees and foreclosed property expenses, were $4.9 billion in the most recent quarter. That's down from $18.8 billion in the second quarter of 2009.

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