Fannie Mae Seeks $2.5 Billion Amid Narrowing Loss
Fannie Mae, the mortgage-finance company operating under federal conservatorship, reported a $1.3 billion third-quarter loss and said it would seek more U.S. aid.
The company requested $2.5 billion from the Treasury Department, most of which will be used to pay a $2.1 billion dividend on the federal government’s nearly 80 percent stake, Washington-based Fannie Mae said today in a Securities and Exchange Commission filing. The firm’s loss for the three-month period that ended Sept. 30 was down from $18.9 billion a year earlier, the company said.
Fannie Mae has received almost $89 billion in taxpayer funds since September 2008, when it was seized by regulators along with McLean, Virginia-based Freddie Mac. The two firms will have received more than $151 billion in government aid and returned some $17 billion in dividends since the U.S. takeover.
“We’re going to get to the point where Fannie and Freddie have basically recovered in terms of their operations and they’re losing money because they’re paying the dividends,” said Guy Cecala, publisher of Inside Mortgage Finance, a Bethesda, Maryland, trade publication. “There are some people who view the dividend as designed to punish them.”
Fannie Mae said the company’s dividend payments will prevent it from earning a profit “for the indefinite future.” Freddie Mac requested $100 million in Treasury aid Nov. 3 after reporting a third-quarter loss and paying $1.6 billion in dividends.
The two government-sponsored enterprises were chartered to boost homeownership by buying mortgages from lenders and providing a guarantee of principal.
Fannie Mae has demanded that lenders repurchase nonperforming loans if they were issued based on inaccurate data. Lenders repurchased or reimbursed the company for losses on about $1.6 billion worth of loans in the third quarter, the company said in the filing.
The company has outstanding repurchase requests on $7.7 billion worth of loans, of which 36 percent have been outstanding for more than 120 days, according to the filing.
To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net.
To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.
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