Fannie Mae requests additional 8.5 billion dollars in government aid

12:23, May 07, 2011      

Email | Print | Subscribe | Comments | Forum 

Fannie Mae, the leading house mortgage lender in the United States, requested the government Friday for an additional 8.5 billion U.S. dollars in aid after seeing huge loss in the first quarter of 2011.

Fannie Mae saw a net loss of 6.5 billion dollars in the first three months of 2011, compared to net income of 73 million dollars in the fourth quarter last year, and a net loss of 11.5 billion dollars in the same period of 2010, the company said in a financial report.

The loss in the first quarter of 2011 from net income in the fourth quarter was due to an increase in credit-related expenses, primarily driven by a decline in home prices during the quarter, said the company.

Home prices on a national basis declined by 1.8 percent in the first quarter this year, which had directly led to more foreclosures and to homeowners abandoning houses that were worthless than they owed on their mortgages, said Fannie Mae.

The company's net loss attributable to common stockholders in the first three months of the year was 8.7 billion dollars, or 1.52 dollar per diluted share, including 2.2 billion dollars in dividend payments to the U.S. Treasury Department, according to the financial report.

As of March 31, 2011, the company's net worth deficit was 8.4 billion dollars. In order to eliminate the deficit, Fannie Mae has requested 8.5 billion dollars aid from the Treasury. The total cost of rescuing the government-controlled mortgage buyer will be 99.7 billion dollars, the most expensive bailout of a single company.

Combined with the bailout of sibling company Freddie Mac, the U.S. government expects their rescue to cost taxpayers about 259 billion dollars, which will cover the mortgage giants' losses on soured loans made in the midst of the housing bubble.

The Obama administration unveiled in February a plan to slowly dissolve the mortgage companies, aiming to reduce the government's role in the mortgage market.

Source: Xinhua

BRICS Leaders Meeting 2011
Japan in aftershocks
  Weekly review  
April 23   Pictures catch ancient & cultural heritage of a Sichuan town
April 28   Will China's rise lead to the decline of U.S.?
April 25   Kunming-Singapore High-Speed Railway begins construction
April 25   Chinese path -- a marvel of world's economic growth
April 23   The week in pictures
April 26   Second excavation to sunken 'Nan'ao No 1' finished
April 27   Guizhou girl designs tea set for Prince William's wedding
April 26   PLA reserve force Type 07 uniform makes debut in Beijing
April 28   Old friends eye for new & higher levels of cooperation
April 29   Shanghai auto show closes


  • Do you have anything to say?


Special Coverage
  • Al-Qaeda leader Osama bin Laden dead
  • BRICS Leaders' Meeting 2011
Major headlines
Editor's Pick
  • Lady Gaga promotes new album "Born This Way" in Mexico
  • Biggest smiling face
  • Russian dancers perform Tchaikovsky Swan Lake Ballet in Xi'an, China's Shaanxi
  • Obama says U.S. making progress in defeating al-Qaida
  • Senior leader hails post-quake reconstruction in southwest China
  • SCO joint anti-terror drill conducted in China's Xinjiang
Hot Forum Dicussion