(Updates to add 2008 loss, other details)
DOW JONES NEWSWIRES
Fannie Mae's (FNM) fourth-quarter net loss widened to $25.2
billion amid massive fair-value losses and credit-related expenses,
bringing its net loss for the year to $58.7 billion.
Still, the mortgage giant's loss narrowed from the third quarter
and revenue increased as Fannie reported improvement in access to
debt markets since late November.
The company submitted a request Wednesday for an additional
$15.2 billion from the U.S. Treasury Department in order to
eliminate its net worth deficit as of Dec. 31, 2008. Three months
earlier, Fannie has a positive net worth of $9.4 billion.
Fannie, along with Freddie Mac (FRE) has suffered greatly as the
housing bubble burst and in September, the government seized both
and agreed to pump $200 billion into them as needed to keep them
solvent.
The Obama administration last week unveiled a plan to pledge
billions of dollars in new programs to save 7 million to 9 million
borrowers, in an ambitions proposal to stabilize house prices and
provide liquidity.
For the fourth quarter, Fannie posted a net loss of $25.2
billion, or $4.47 a share, compared with a year-earlier net loss of
$3.65 billion, or $3.80 a share. The latest quarter was hurt by
$12.3 billion in net fair value losses, $12 billion in
credit-related expenses and $4.6 billion in securities
impairments.
Fannie's third-quarter net loss was $29 billion.
Net revenue increased 82% to $5.6 billion as net interest income
more than doubled and guaranty-fee income grew 72%.
The estimated fair value of Fannie's net assets declined to
negative $105.2 billion on Dec. 31 from positive $35.8 billion a
year earlier.
Fannie acquired 20,998 single-family real-estate owned
properties through foreclosures in the fourth quarter, down 29%
from the third quarter. Credit losses plus foreclosed property
expenses were $12 billion in the quarter, up 30% sequentially.
The company said market conditions that contributed to its net
loss for each quarter of 2008 were expected to continue, and
possibly worsen in 2009, causing further reductions to Fannie's net
worth.
The Congressional Budget Office has said the seizure of Fannie
and Freddie would likely cost the government $238 billion in 2009,
widening the federal deficit to $1.2 trillion.
Fannie also said it received a formal order of investigation
from the Securities and Exchange Commission last month regarding
certain accounting and disclosure matters.
Shares were unchanged in after-hours trading at 49 cents.
Fannie's stock has lost more than 90% of its value from August, and
is down 36% this year.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com
