Fannie Mae, the largest provider of funding for US home loans, yesterday said it would again tap the Treasury to plug a net worth deficit after bad mortgages and foreclosure prevention efforts resulted in a $18.9 billion net loss in the third quarter.
Fannie Mae, which was seized by the government last year, said the quarterly loss stemmed from $22 billion in credit-related expenses, including charges on impaired loans it bought from mortgage-backed securities as it modified loans under President Barack Obama’s foreclosure prevention plan.
The company also boosted its provision for credit losses in future quarters.
Fannie’s regulator will request $15 billion from the Treasury which will increase the total government support to $60.9 billion.
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