Fannie Mae's first-quarter loss narrowed on fewer writedowns and credit-loss provisions and the government-backed mortgage company requested another $8.5 billion in aid from the federal government.
Shares rose 6.8% to $1.10 in recent premarket trading as stock futures were sharply higher following news of the European Union's effort to stave off a run on the euro.
Regulators took control of Fannie and its smaller rival, Freddie Mac, the biggest providers of funds for home mortgages, in September 2008. Through the end of 2009, the government poured some $125 billion of capital into the companies by buying preferred stock paying 10% dividends. Including Fannie's first-quarter request, its aid will stand at $84.6 billion.
Freddie on Wednesday posted a narrower first-quarter loss of $6.7 billion and said it will need an injection of $10.6 billion from the Treasury--its first request for aid in four quarters. Most of the loss in the latest quarter resulted from accounting changes that brought about $1.5 trillion in mortgage guarantees onto its balance sheet.
For the latest quarter, Fannie Mae reported a loss of $11.5 billion, or $2.29 a share, compared with a year-earlier loss of $23.17 billion, or $4.09 a share. The latest results included $236 million in writedowns, while the prior-year included $5.7 billion.
Revenue fell 14% to $2.9 billion.
Loan-loss provisions soared to $11.94 billion from $2.51 billion a year earlier, but total provisions fell to $11.88 billion from $20.87 billion as the prior-year figure included $17.83 billion of set-asides for guaranty losses.
The rate of serious delinquencies — loans at least three months past due or awaiting foreclosure — rose to 5.47% from 3.15% and 5.38%, respectively. Growth in February for single-family homes was the smallest in more than a year.
Fannie and Freddie, which buy home loans from banks and turn most of them into securities for sale to other investors, suffered huge losses during the housing downturn.
