Fannie Mae is nearing another not so magical milestone.
The government-owned mortgage investor posted its latest quarterly loss Friday, blaming the recent house-price double dip for a rise in credit costs. Fannie (FNMA) also said its regulator will ask the government for more money to cover those losses.
The $6.5 billion request from the Federal Housing Finance Agency will bring the company’s cumulative draw on Treasury funds since its September 2008 takeover to $99.7 billion – which is greater than the annual economic output of fine nations including Sudan, Libya and Bulgaria, to name three.
The company is quick to point out that its net draw on Treasury is reduced by the $12 billion in preferred stock dividends it has paid taxpayers since September 2008. That is to say, the company’s net bailout is just $87 billion – which puts it more in league with smaller places, like Ethiopia and Uzbekistan. Big deal!
The approach of this unmagical moment comes the week the company, by virtue of some accounting changes and some longstanding Fortune policies, rocketed up the Fortune 500 list of biggest companies to No. 5 – this for a year in which its revenue tumbled 22% and it lost $14 billion.
The good news, such as it is, is that Fannie’s first-quarter loss declined by almost half, to $6.5 billion from $11 billion a year earlier. Revenue rose 72% from a year ago to $5.2 billion.
“We expect our credit-related expenses to remain elevated in 2011 as we continue to be negatively impacted by the prolonged decline in home prices,” said CEO Michael J. Williams. “As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company’s overall single-family guaranty book of business. We continue to be the leading provider of liquidity for single-family mortgages and affordable multifamily rental housing while we remain focused on our responsibility to find solutions for distressed homeowners and their families.”
So the news here is still not good. But as many of the loons in Washington seem to have finally accepted, at least for now, it’s a job someone has got to do.
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