Fannie Mae has reported a net loss of $16.9 billion in 2011, up from its $14 billion loss in 2010. For the fourth quarter of 2011, Fannie Mae reported a net loss of $2.4 billion, down from the net loss of $5.1 billion in the third quarter.
According to the government-sponsored enterprise (GSE), its 2011 net loss was due primarily to a $6.1 billion increase in net fair value losses, which resulted from losses in the company's risk management derivatives that were caused by a ‘significant decline in interest rates during the year.’
Fannie Mae's net worth deficit, as of the end of 2011, was $4.6 billion. Following the GSE's latest quarterly report, the Federal Housing Finance Agency will submit a request to the Department of the Treasury for $4.571 billion to eliminate the GSE's net worth deficit.
However, Fannie Mae President and CEO Michael J. Williams insists that the GSE was on a winning streak.
‘While economic factors such as falling home prices and high unemployment produced strong headwinds for our business again in 2011, we continued to grow a very strong new book of business as we have since 2009,’ says Williams. ‘During the year, Fannie Mae funded the market with more than $650 billion in liquidity and maintained its focus on strengthening Fannie Mae's ability to support and improve the housing industry.’