Fannie Post $23.2B Loss In First Quarter; Requests $19B

Posted by Orb Staff on May 11, 2009 No Comments
Categories : Residential Mortgage

reporting a $23.2 billion loss for the first quarter of 2009, Fannie Mae has turned to the Treasury for $19 billion. Fannie's regulator, the Federal Housing Finance Agency (FHFA), has requested that the Treasury provide the funds by June 30. First-quarter results were driven primarily by credit-related expenses, securities impairments and fair-value losses, according to the government-sponsored enterprise (GSE). Credit-related expenses, which are the total provision for credit losses plus foreclosed property expenses, were $20.9 billion in the first quarter of 2009, up 74% from $12.0 billion in the fourth quarter of 2008. The company's provision for credit losses was $20.3 billion – almost twice the $11 billion provision in the fourth quarter of last year. As of the end of March, Fannie guaranteed $144.9 billion of nonperforming loans, compared with $119.2 billion on Dec. 31, 2008, and $10.9 billion on March 31, 2008. "We recognized $5.7 billion of other-than-temporary impairments on our available-for-sale securities relating to additional impairment losses on some of our Alt-A and subprime private-label securities that we had previously impaired, as well as impairment losses on other Alt-A and subprime securities, due to continued deterioration in the credit quality of the loans underlying these securities and further declines in the expected cashflows," Fannie Mae's quarterly report says. Net fair value losses were $1.5 billion in the first quarter. The GSE says it will adopt the Financial Accounting Standards Board's pronouncements on other-than-temporary impairments for debt securities for the quarter ending June 30. Fannie Mae, which is also the program manager for the Obama administration's Making Home Affordable program, released data about its foreclosure prevention efforts. In the first quarter of 2009, 20,424 HomeSaver Advance loans were originated, compared with 25,783 in the fourth quarter of 2008; 12,418 loan modifications were performed (almost doubling the 6,276 performed at the end of last year); repayment plans and forbearances totaled 7,445; and preforeclosure sales and deeds-in-lieu totaled 5,971. Fannie Mae also acquired 25,374 single-family real estate-owned (REO) properties through foreclosure in the first quarter of 2009, compared with 20,998 in the fourth quarter of 2008. As of March 31, the GSE's inventory of single-family REO properties was 62,371, compared with 63,538 at the end of the fourth quarter of 2008. SOURCE: Fan

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