Fannie Mae Losses $2.3 Billion in Quarter
Posted on: Friday, 8 August 2008, 18:00 CDT
The U.S. government-sponsored mortgage broker Federal National Mortgage Association reported a second quarter net loss Friday of $2.3 billion.
The company said it would reduce its dividend per share to 5 cents from a first quarter dividend of 35 cents per share to preserve $1.9 billion in capital through 2009.
Falling home values and emerging troubles in credit markets have shaken Frannie Mae and the smaller Federal Home Loan Mortgage Corp., which reported second quarter losses of $821 million Wednesday.
In the quarter, Fannie Mae posted $5.3 billion in credit-related expenses, a company statement said.
Losses at the two companies, which hold or guarantee more than $5 trillion in mortgages, spurred the U.S. Treasury to design an emergency rescue plan with extended credit lines and the option of the government purchasing equity in the companies. It was signed into law last week.
Fannie Mae Chief Executive Officer Daniel Mudd said "volatility and disruptions in the capital markets became even more pronounced in July."
"In addition, credit performance has continued to deteriorate," Mudd said.
Source: United Press International
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