Fannie Mae and CFO Susan McFarlandAfter reporting $5.1 billion in third-quarter losses Fannie Mae is seeking $7.8 billion more in Treasury Department aid, according to Bloomberg News. The loss is up from $3.5 billion for the prior year quarter and $2.9 billion from the second-quarter of this year.
The request comes shortly after federal regulators found the company to be stabilizing.
The losses are fueled by defaults on loans made before 2009 and plummeting interest rates that have weighed on expected revenue. Still, the company’s revenues have been increasing of late as loans originated since 2009 have higher fees and were given to stronger borrowers. Moreover, the number of homeowners that are 90 days or more delinquent on Fannie Mae loans has decreased every quarter since early 2010. They now comprise just 4 percent of Fannie’s single-family loan portfolio.
When requesting Treasury aid Fannie and Freddie Mac vowed to repay a 10 percent dividend. Thus far the two companies have requested about $185 million and repaid about $32 billion, leaving taxpayers to pay the remaining $153 billion. Fannie’s most recent, $7.8 billion request for more aid includes $2.5 billion that was to be repaid to Treasury in the form of dividends. Last week, Freddie Mac reported losses of $4.4 billion and is seeking $6 billion more of aid. [Bloomberg News]