Fannie Mae requests additional 8.5 billion dollars in government aid

12:23, May 07, 2011      

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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

 
 
     
 
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(Editor:王千原雪)

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