WASHINGTON - Secondary mortgage market giant Fannie Mae, operating under federal conservatorship since September, reported a $29-billion loss for the third quarter last week, bringing year-to-date losses to a staggering $34.5 billion and increasing the likelihood it will need to tap federal bailout funds.
The third quarter loss includes a $21.4-billion charge to establish a deferred tax asset valuation allowance because of the rapid deterioration of the market.
The year-to-date losses have reduced the net worth of Fannie Mae to just $9.4 billion at Sept. 30, from $44.1 billion at year-end 2007. And half of the remaining net worth consists of retained deferred tax assets, which are also subject to reduction or elimination.
This makes it likely Fannie Mae will tap the $100-billion line of credit it has with the Treasury under the conservatorship some time next year, the company said.
