Fannie Mae needs bigger lifeline By Tami Luhby @CNNMoney November 8, 2011
NEW YORK (CNNMoney) — Losses widened at mortgage giant Fannie Mae in the third quarter, forcing the government-controlled firm to request another $7.8 billion from the Treasury Department.
The company reported Tuesday a net loss of $5.1 billion, compared to a net loss of $2.9 billion in the second quarter. A year ago, Fannie Mae reported a net loss of $1.3 billion.
The current quarter’s loss was driven mainly by continued delinquency issues in mortgages it had purchased or guaranteed before 2009. Additionally, Fannie Mae suffered from an increase in expenses related to foreclosed properties. Declining interest rates also contributed to the company’s losses.
Fannie Mae’s (FNMA, Fortune 500) latest request for Treasury funding brings its total bailout to $112.6 billion. This will require an annualized dividend payment to the government of $11.3 billion, more than the company has ever earned in annual net income.