Nov. 16 (Bloomberg) -- Fannie Mae, the largest source of money for U.S. home loans, said its accounting of credit losses is accurate and reflects changes in market conditions.

The company held a conference call with investors a day after its shares plunged 10 percent following a Fortune magazine article that said Washington-based Fannie Mae altered how it measures the impact of mortgage foreclosures in a way that downplays losses.

``The majority of these loans don't result in any losses,'' Fannie Mae Chief Financial Officer Stephen Swad told analysts and investors on the call today.

Fannie Mae believes its credit losses will be between 4 basis points and 6 basis points during 2007, spokesman Brian Faith said yesterday in a news release, reiterating statements the company made in quarterly filings to the U.S. Securities and Exchange Commission on Nov. 9. A basis point is 0.01 percentage point.

Fannie Mae fell $2.51 to $40.53 today as of 10:01 a.m. in New York Stock Exchange composite trading.

Fannie Mae Chief Executive Officer Daniel Mudd told investors on Nov. 9 that the company's loan loss ratio could at least double to 8 to 10 basis points next year. The ratio was 4 basis points for the nine months ended Sept. 30, and 1.8 basis points in the year-ago period, the filings show.

The ratio for the first nine months of 2007 would have been 7.5 basis points under Fannie Mae's alternative accounting methods, Fortune reported in a story posted on its Web site on Nov. 14 that relied on information in the Nov. 9 filings.

The company on Nov. 9 said its third-quarter loss more than doubled to $1.39 billion as a deepening housing slump increased mortgage delinquencies. The net loss was caused by a $2.24 billion decline in the value of derivative contracts and $1.2 billion in credit losses among the $2.7 trillion of mortgage assets Fannie Mae owns or guarantees, Fannie Mae reported.

To contact the reporters on this story: James Tyson in Washington at at jtyson@bloomberg.net

Last Updated: November 16, 2007 10:06 EST