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Earnings Roundup / Fannie Mae

$15 billion is asked of Treasury

February 27, 2009|Times Wire Reports

Fannie Mae said Thursday that it needed $15.2 billion in government aid because it lost nearly $59 billion last year as the foreclosure crisis mushroomed.

The mortgage finance company hemorrhaged $25.2 billion, or $4.47 a share, in the fourth quarter. That compares with a loss of $3.6 billion, or $3.80, a year earlier.

Fannie's net worth -- the value of its assets minus the value of its liabilities -- fell below zero at the end of the quarter, forcing the company to request funding from the government for the first time.

The government seized control of Fannie Mae and its sibling Freddie Mac in September and last week doubled their lifelines to $200 billion each to guarantee they would not fail.

Treasury Secretary Timothy F. Geithner said the increase in cash was "not a judgment about the expected losses ahead. It's just a way to make sure people understand that they will be able to play this role going forward."

Fannie Mae said its fourth-quarter loss was driven by $12 billion in credit losses due to declining housing market conditions, $12.3 billion in losses on derivatives and $4.6 billion in write-downs of the value of its mortgage-backed securities.

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