Fannie Mae Posts Loss, Seek $15 Billion Aid

2009 November 5

Fannie Mae, the mortgage-finance company under federal control, said it will seek $15 billion in U.S. Treasury aid and sell $2.6 billion in unused tax credits after posting its ninth straight quarterly loss.

A third-quarter net loss of $18.9 billion pushed Fannie Mae to request its fourth draw on a $200 billion government lifeline, according to a Securities and Exchange Commission filing today. The Washington-based company said it reached an agreement to sell the low-income housing tax credits to avoid impairments when the credits expire.

The Treasury, which has yet to approve the sale, is considering whether to let Goldman Sachs Group Inc. buy some of the credits. Goldman Sachs, the most profitable securities firm in Wall Street history, could use the deal to lower its tax bill. Fannie Mae has accumulated about $5.2 billion in the credits, and hasn’t been able to recognize the majority of the tax benefits because it hasn’t been profitable since 2007.

Fannie Mae, which owns or guarantees more than 20 percent of the $12 trillion U.S. home-loan market, has been hobbled by a three-year housing slump that has wiped 28 percent off home values nationwide and led to record foreclosures.

Fannie Mae Posts Loss, Plans to Sell Tax Credits

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