AI
Wednesday, February 27, 2008 10:29:43 AM
Fannie Mae Posts Nearly $3.6B Loss in 4Q
By MARCY GORDON,AP
Posted: 2008-02-27 09:38:27
WASHINGTON (AP) - Fannie Mae on Wednesday said it lost nearly $3.6 billion in the fourth quarter of 2007 as home-loan delinquencies mounted and the company preserved cash in anticipation of further losses.
Shares of Fannie fell by more than 5 percent.
The quarterly loss at Fannie, the largest U.S. buyer and backer of home loans, contrasts with a profit of $604 million in the same period a year earlier.
Fannie's $3.56 billion fourth-quarter loss was equivalent to $3.80 a share. It earned 49 cents a share a year earlier. Thomson Financial said Wall Street analysts had expected the company to lose $1.24 a share in the latest period.
The government-sponsored company was forced to set aside billions to account for bad loans. Its results clearly showed the ravages of the mortgage-market turmoil that began last spring and rattled the economy.
Because Fannie customarily buys more solid mortgages as opposed to the high-risk subprime loans that have mushroomed into default, the latest losses show how pervasive the mortgage crisis has become.
The company's loss for all of 2007 was $2.05 billion, or $2.63 a share, compared with a profit of $4.05 billion, or $3.65 a share, in 2006.
"We are working through the toughest housing and mortgage markets in a generation," the company's president and CEO, Daniel Mudd, said in a statement. He said the company's losses reflected "the significant decline in home prices in a number of large regional markets and the growing number of borrowers struggling with their mortgages."
Mudd called 2008 "another tough year." Washington-based Fannie expects to lose money this year on eight to 10 of every 1,000 mortgages held on its $2.4 trillion book - a steep increase from four to six in 2007.
In addition to having to set aside an additional $2 billion in the fourth quarter for soured loans, Fannie also saw its profits eroded by $3.2 billion in losses from derivatives, the complex financial instruments it uses to hedge against swings in interest rates.
In morning trading, Fannie's shares fell $1.51 to $25.46.
http://money.aol.com/news/articles/_a/fannie-mae-posts-nearly-36b-loss-in-4q/n20080227093809990008
double bottom holding...
By MARCY GORDON,AP
Posted: 2008-02-27 09:38:27
WASHINGTON (AP) - Fannie Mae on Wednesday said it lost nearly $3.6 billion in the fourth quarter of 2007 as home-loan delinquencies mounted and the company preserved cash in anticipation of further losses.
Shares of Fannie fell by more than 5 percent.
The quarterly loss at Fannie, the largest U.S. buyer and backer of home loans, contrasts with a profit of $604 million in the same period a year earlier.
Fannie's $3.56 billion fourth-quarter loss was equivalent to $3.80 a share. It earned 49 cents a share a year earlier. Thomson Financial said Wall Street analysts had expected the company to lose $1.24 a share in the latest period.
The government-sponsored company was forced to set aside billions to account for bad loans. Its results clearly showed the ravages of the mortgage-market turmoil that began last spring and rattled the economy.
Because Fannie customarily buys more solid mortgages as opposed to the high-risk subprime loans that have mushroomed into default, the latest losses show how pervasive the mortgage crisis has become.
The company's loss for all of 2007 was $2.05 billion, or $2.63 a share, compared with a profit of $4.05 billion, or $3.65 a share, in 2006.
"We are working through the toughest housing and mortgage markets in a generation," the company's president and CEO, Daniel Mudd, said in a statement. He said the company's losses reflected "the significant decline in home prices in a number of large regional markets and the growing number of borrowers struggling with their mortgages."
Mudd called 2008 "another tough year." Washington-based Fannie expects to lose money this year on eight to 10 of every 1,000 mortgages held on its $2.4 trillion book - a steep increase from four to six in 2007.
In addition to having to set aside an additional $2 billion in the fourth quarter for soured loans, Fannie also saw its profits eroded by $3.2 billion in losses from derivatives, the complex financial instruments it uses to hedge against swings in interest rates.
In morning trading, Fannie's shares fell $1.51 to $25.46.
http://money.aol.com/news/articles/_a/fannie-mae-posts-nearly-36b-loss-in-4q/n20080227093809990008
double bottom holding...
Solar Stocks #board-11148
Peak Oil #board-6609
Coal #board-2809
Real Estate Bubble #board-7285
Lender Implosion #board-10076
HomeBuilders #board-1680
Your Economy #board-1948
Global Warming #board-11877
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