Fannie Mae Loses $19.8bn in Q309
Fannie Mae (FNM) posted a net loss of $19.8bn, or $3.47 per share, in Q309, compared with a net loss of $15.2bn in Q209, according to a Securities and Exchange Commission (SEC) filing. The results were impacted primarily by $22bn in credit-related expenses, which substantially offset revenue of $5.9bn, Fannie said. The Q309 loss included $883m in dividends paid on senior preferred stock. Fannie’s year-to-date losses totaled $58.1bn, including $1.3bn in senior preferred stock dividends, for the first nine months of the year. Losses were primarily driven by credit-related expenses of $61.6bn, including a $41.4bn build up of loss reserves, other-than-temporary impairment of $7.3bn and fair value losses of $2.2bn. For the first nine months of 2008, net losses were $33.5bn. Fannie said as of the end of Q309, it had 487,000 trial modifications in progress through the Making Home Affordable Modification Plan (HAMP) and it has met the Treasury Department’s goal of 500,000 modifications in process by November 1. Total loan workouts for Q309 totaled 49,000, including 28,000 loan modifications, compared with 41,000 workouts, including 17,000 modifications, during Q209. “Even though the volume of trial modifications that we have initiated on Fannie Mae loans under the Home Affordable Modification Program has been substantial, a low percentage of our trial modifications had converted into completed loan modifications as of September 30, 2009,” Fannie Mae said. “One reason is that activity under the program has been increasing over time, so that many loans have not had enough time to complete the trial modification period prior to September 30, 2009.” Also on Thursday, Fannie announced a new program that will allow new deed-in-lieu program that allows the borrower to sign a lease to rent their home from Fannie Mae in exchange for the voluntary transfer of the property back to the lender. Write to Austin Kilgore.