WASHINGTON, Aug. 6 (UPI) — Fannie Mae posted a $2.9 billion net loss for the second quarter and has now had losses in 15 of the last 16 quarters, U.S. officials said.
The government-backed mortgage agency will ask the U.S. government for another $2.8 billion in bailout funds after it makes its quarterly dividend payments to the Treasury, The Wall Street Journal reported Saturday.
Since being taken over by the government three years ago, Fannie Mae has required $104 billion in aid, but financial experts said once the glut of foreclosed homes is cleared things should start turning around.
“You’re getting delinquencies down, but as they work those assets through the foreclosure process, the losses could continue … for another year or two,” said Paul Miller, analyst at FBR Capital Markets.
Fannie Mae owned about 136,000 properties at the end of June. Officials at the agency said the majority of its losses resulted from loans made between 2005 and 2008.
New loans are more secure because of tightened loan standards, said Susan McFarland, Fannie Mae’s chief executive officer.
“We feel very good about the new book,” McFarland said. “Its performance gets masked by the effects of working through the legacy book.”