Fannie Mae has reported a $25.2 billion loss in the fourth quarter of 2008, driven primarily by net fair value losses, credit-related expense and securities impairments. As was intimated earlier this year, Fannie Mae's regulator, the Federal Housing Finance Agency (FHFA), requested $15.2 billion from the Treasury as a result.
The FHFA has requested that the Treasury provide the funds on or prior to March 31 under the Senior Preferred Stock Purchase Agreement in order to eliminate the company's net worth deficit as of Dec. 31, 2008.
"We expect the market conditions that contributed to our net loss for each quarter of 2008 to continue and possibly worsen in 2009, which is likely to cause further reductions in our net worth," a Fannie Mae statement says.
SOURCE: Fannie Mae