Fannie Mae may post a record net loss in its first quarterly report since being seized by regulators as Herb Allison, its chief executive, writes off bad debt and increases default estimates, observers say.

The mortgage finance company may report a third-quarter loss of at least $20 billion, including a previously announced plan to write down most of its tax credits, according to Howard Shapiro at Fox-Pitt Kelton Cochran Caronia Waller in New York.

Fannie may post its results as early as today.

"It's going to be an ugly quarter," Mr. Shapiro said. Fannie has "a new management team, it's got a new mission, and they really have no stake in running it for profit right now."

Paul Miller, an analyst at Friedman, Billings, Ramsey Group Inc. in Arlington, Va., said Mr. Allison, who was installed when the government seized Fannie and Freddie Mac on Sept. 6, may report slashed asset values and higher loss provisions and default estimates.

Fannie has posted losses of $9.4 billion in the past year as the worst housing market since the Great Depression has increased defaults.

"Right now the market's numb about how bad the housing market is," Mr. Miller said. "So why not clean the books out and clean it up?"

Fannie's new management team will likely increase reserves for future credit losses, from $3.7 billion last quarter, and it will take a higher-than-expected charge against its $5.2 billion of "temporary" losses, he said. It also may increase its full-year credit-loss ratio projection and post losses on its derivative portfolio.

The writedown of deferred tax assets, valued at $20.6 billion as of June 30, could cut Fannie's book value in half and increase the likelihood that the Treasury Department will need to pump cash into the company. If Freddie followed suit, as analysts expect, it would need to write down more than $18 billion, leaving it with a book value of negative-$6 billion and triggering Treasury aid.

The Federal Housing Finance Agency put Fannie and Freddie under federal control and forced out their managers after examiners found their capital to be too low and of poor quality. Treasury Secretary Henry Paulson has pledged to invest as much as $100 billion into each company as needed to keep their net worth positive.

According to Mr. Miller, Fannie and Freddie will need that money "sooner rather than later." Mr. Allison, 65, will likely implement more conservative accounting policies and will need to write down higher-than-expected credit costs, the analyst said.

Richard Fisher, the president of the Federal Reserve Bank of Dallas, said last month that examiners from the Federal Reserve Board, who helped the FHFA review the companies' books, found that Fannie and Freddie also may have been understating their losses.

"When you look at temporary impairments and so on, we found that many of them might not be so temporary," Mr. Fisher said in response to an audience question at a speech in Austin.

With Fannie under conservatorship, Mr. Allison is not as beholden to shareholders as his predecessor, Daniel Mudd.

Because both Fannie and Freddie had their market value nearly wiped out by the federal takeover, Mr. Miller said, "the new management team has no incentive to sugarcoat their earnings."

Fannie and Freddie shares, which were trading around $50 a year ago, are under $1 now. Nearly a dozen analysts have dropped or suspended equity coverage now that regulators are pushing Fannie and Freddie to help the mortgage market, even at the expense of profitability.

Fannie reported losses of $2.3 billion for the second quarter and $1.4 billion for the third quarter of last year.

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