Aug. 6 (Bloomberg) -- Fannie Mae, the mortgage-finance company taken over by the government, asked the U.S. Treasury for a $10.7 billion capital investment as an eighth straight quarterly loss drove its net worth below zero once again.

A second-quarter net loss of $14.8 billion, or $2.67 a share, pushed the company to request money for the third time from a $200 billion government lifeline, Washington-based Fannie Mae said in a filing today with the Securities and Exchange Commission.

Today’s results bring the company’s cumulative losses over the last two years to $101.6 billion and will bring its total draw on the Treasury to $44.9 billion since April.

The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees have deteriorated as a recession that began in December 2007 pushed more homeowners into foreclosure. A record 1.5 million U.S. properties received a default or auction notice or were seized in the first half of this year, 15 percent more than a year earlier, as employers cut jobs and temporary programs to assist homeowners came to an end, RealtyTrac Inc. said July 16.

Fannie Mae said it expects the quality of its assets to worsen further and to continue accumulating losses as it executes President Barack Obama’s efforts to modify or refinance loans for as many as nine million homeowners.

“We do not expect to operate profitably in the foreseeable future,” the company said in its filing. “We expect that we will experience adverse financial effects as we seek to fulfill our mission by concentrating our efforts on keeping people in their homes and preventing foreclosures.”

Fannie Mae and smaller competitor Freddie Mac, which own or guarantee almost half of U.S. residential mortgage debt, are integral to Obama’s plan to help homeowners. In February, the government doubled its emergency capital commitment for each company from $100 billion, which the Treasury makes through preferred stock purchases.

$50.7 Billion in Aid

McLean, Virginia-based Freddie Mac has tapped $50.7 billion in aid in since November as the value of its assets dropped below the amount it owed on obligations. The companies’ regulator, James Lockhart, said yesterday that he is stepping down to pursue opportunities in business. His departure comes as debate grows over the future of the mortgage-finance companies once they emerge from the housing crisis.

Fannie Mae’s net worth, or the difference between assets and liabilities, was negative $10.6 billion as of March 31, compared with negative $18.9 billion on March 31 and negative $15.2 billion on Dec. 31, according to company statements.

Fannie Mae and Freddie Mac are the largest U.S. mortgage- finance companies, owning or guaranteeing about $5.4 trillion of the $12 trillion residential mortgage debt.

The Federal Housing Finance Agency put the companies under its control Sept. 6 and forced out management after examiners said the two might be at risk of failing amid the worst housing slump since the Great Depression.

Increased Reserves

The company increased reserves for future credit losses to $55.1 billion last quarter from $41.7 billion in the previous quarter.

The amount of nonperforming loans that Fannie Mae guarantees for other investors rose to $144.2 billion from $121.4 billion in the first quarter, according to the filing. Fannie Mae also owned $26.3 billion in non-performing loans as of June 30, up from $23.2 billion in the first quarter.

The fair value of Fannie Mae’s assets was negative $102 billion last quarter, compared with $110.3 billion at the end of March.

Fannie Mae and Freddie Mac shares, which were above $30 in March of last year, have been trading at less than $1 since December, except for one day in March when Freddie closed at $1.01. Fannie Mae closed at 79 cents today on the New York Stock Exchange, and Freddie Mac finished the day at 84 cents.

Fannie Mae was created in the 1930s under President Franklin D. Roosevelt’s “New Deal” plan to revive the economy. Freddie Mac was started in 1970.

The companies were designed primarily to lower the cost of home ownership by buying mortgages from lenders, freeing up cash at banks to make more loans. They make money by financing mortgage-asset purchases with low-cost debt and on guarantees of home-loan securities they create out of loans from lenders.

To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.

Last Updated: August 6, 2009 18:30 EDT