WASHINGTON – Fannie Mae's third-quarter loss more than doubled to $1.4 billion, the secondary mortgage market giant said Friday, while forecasting industry troubles through 2008 because of mounting home loan delinquencies.
"This is a tough year for our industry, and Fannie Mae is not immune to the challenges facing the mortgage markets. Our results reflect that," CEO Daniel Mudd, said during a conference call with investors.
This year’s losses were caused by a $2.24 billion decline in the value of derivative contracts and $1.2 billion in credit losses among the $2.7 trillion of mortgage assets Fannie Mae owns or guarantees.
For the first three quarters, Fannie’s net income declined by more than half to $1.51 billion, from $3.46 bill for the first nine months in 2006, as credit expenses related to overdue loans soared to $2 billion, from $400 million last year.
The company also reported $1.3 billion of realized and unrealized losses on its $76.2 billion of AAA-rated securities backed by subprime and Alt-A loans. Fannie’s expenses for foreclosed properties tripled to $269 million for the nine months, from $89 million last year.
