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Thursday, May 08, 2008

Fannie Mae Posts $2.2 Billion Loss In First Quarter of 2008

Fannie Mae, which owns or guarantees nearly $3 trillion of mortgage-related investments, posted a loss of $2.19 ($2.57 per share) from January through March of this year. Fannie Mae is chartered by the government to keep mortgage money flowing and is responsible for about half the securities being issued to fund home mortgages. It packages mortgages into securities for sale to investors, promising to make the payments if the borrowers default. The company also buys mortgages directly. Those activities help lenders get mortgages off their books and replenish the funds needed to make more loans.

One factor in the loss is that home prices fell an average of 3 percent in the quarter and are expected to fall 7 to 9 percent nationally this year. (The Washington Post)

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