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Fannie Mae seeks US$4.6b in aid
Source: Bloomberg News |
March 1, 2012, Thursday
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FANNIE Mae, the biggest backer of US home loans, reported a US$2.4 billion net loss for the fourth quarter and sought nearly US$4.6 billion from the US Treasury Department to balance its books.
Washington-based Fannie Mae, which has operated under US guardianship since 2008, is requesting the government aid to close a net-worth deficit caused in part by a dividend it is required to pay to the Treasury, which owns nearly 80 percent of the company. Fannie Mae, which reported fourth-quarter and full-year results in a Securities and Exchange Commission filing yesterday, had a US$5.1 billion loss in the third quarter.
A year ago, Fannie Mae reported its first quarterly profit since being seized during the credit crisis in September 2008. The US$73 million net income for the three months ending December 31, 2010, was tied to a US$1.3 billion payment from Bank of America Corp to settle claims over defaulted loans. Even with the profit, Fannie Mae needed US$2.6 billion in aid to make its US$2.2 billion dividend payment to Treasury.
Fannie Mae and rival Freddie Mac were taken under US guardianship amid losses stemming from the collapse of the subprime mortgage market. The two companies bundle and sell mortgages into securities to provide liquidity for the US housing market.
Washington-based Fannie Mae, which has operated under US guardianship since 2008, is requesting the government aid to close a net-worth deficit caused in part by a dividend it is required to pay to the Treasury, which owns nearly 80 percent of the company. Fannie Mae, which reported fourth-quarter and full-year results in a Securities and Exchange Commission filing yesterday, had a US$5.1 billion loss in the third quarter.
A year ago, Fannie Mae reported its first quarterly profit since being seized during the credit crisis in September 2008. The US$73 million net income for the three months ending December 31, 2010, was tied to a US$1.3 billion payment from Bank of America Corp to settle claims over defaulted loans. Even with the profit, Fannie Mae needed US$2.6 billion in aid to make its US$2.2 billion dividend payment to Treasury.
Fannie Mae and rival Freddie Mac were taken under US guardianship amid losses stemming from the collapse of the subprime mortgage market. The two companies bundle and sell mortgages into securities to provide liquidity for the US housing market.
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