Fannie Mae reported a net loss of $1.3 billion in the third quarter of 2010 on Friday afternoon, up from $1.2 billion in the previous quarter.
The company’s net loss attributable to common stockholders was $3.5 billion, including $2.1 billion in dividend payments to the U.S. Treasury. The GSE said it requested $2.5 billion from the Treasury to eliminate the company’s net worth deficit of $2.4 billion as of September 30, 2010.
“Our operating results reflect our ongoing efforts to manage the credit-related expenses in our legacy business and build a new, profitable book of business,” said Fannie Mae President and CEO Michael J. Williams.
“The loans we have acquired since the beginning of 2009 reflect our commitment to realistic, common-sense lending standards and sustainable homeownership. Their credit profile remains strong, and we expect these loans to be profitable over their lifecycle. We are building this new book of business while we continue to provide liquidity to America’s housing market as it struggles to recover, and to support programs to help families stay in their homes and avoid foreclosure whenever possible.”
According to SEC documents, the GSE’s outstanding unpaid principal balance of reverse mortgages in its portfolio was $50.8 billion as of September 30, 2010 and $50.2 billion as of December 31, 2009. Fannie Mae’s market share of new reverse mortgage acquisitions fell below 1% in the third quarter of 2010, down from 20% in the third quarter of 2009.
“The decrease in our market share was a result of changes in our pricing strategy and market conditions,” said Fannie Mae. “Because home equity conversion mortgages are insured by the federal government, we believe that we have limited exposure to losses on these loans.”
The GSE announced it would no longer purchase reverse mortgages in October due to systems lacking the ability to handle the new HECM Standard and Saver products
