- 29Feb
(Reuters) - Fannie Mae (FNMA.OB), the biggest source of money for U.S. home loans, on Wednesday said it would seek $4.6 billion in additional federal aid after reporting a fourth-quarter loss.
The government-controlled mortgage finance firm earlier Wednesday posted a loss of $2.4 billion for the quarter ended December 31. That pushed Fannie Mae's loss for 2011 to $16.9 billion from $14.0 billion a year earlier, the company said.
Fannie Mae's pre-2009 book of loans and declining home prices continues to make it difficult for the firm to turn a profit.
"We think that we have reserved for and recognized substantially all of the credit losses associated with the legacy book," said Susan McFarland, executive vice president and chief financial officer in an interview.
The government seized Fannie Mae and Freddie Mac, which together back roughly half of all outstanding U.S. mortgages, in September 2008 as losses from failing home loans threatened the agencies' solvency.
Fannie Mae has borrowed more than $116 billion from the government and paid almost $20 billion in the form of dividends.
"We're very focused on returning to profitability so we don't have to draw (from Treasury) to cover operating losses," said McFarland.
Freddie Mac, which hasn't yet reported fourth-quarter results, has received more than $71 billion in government aid and paid back about $15 billion as of the third quarter.
Fannie Mae's credit-related expenses were $5.5 billion in the fourth quarter, compared with $4.3 billion a year earlier and $4.9 billion in the third quarter.
Fannie Mae and Freddie Mac don't lend to consumers. Rather, they buy and insure mortgages from banks to allow lenders to make more loans.
In the fourth quarter, the firm's provision for credit losses and foreclosed-property expenses rose to $4.7 billion from $4.5 billion in the third quarter. Its provision for loan losses narrowed to $18.7 billion from $23.6 billion a year ago.
(Reporting by Margaret Chadbourn; Editing by Padraic Cassidy)
The Carver news team is determined to keep you up to date with the latest business news from all around
the world. Carver PA Corporation is a multi-disciplinary company which provides a number of Industrial
Training programs, Consulting Services and Recruitment Services on a global scale.
