Fannie Mae reports $3.55 billion Q4 loss

27 February 2008

Mumbai: Fannie Mae, the largest home loan provider in the US, reported a $3.55 billion fourth-quarter loss and said it expects a worse slump this year amidst rising foreclosures.

Fannie Mae saw the value of its derivatives contract fall $3.2 billion derivative contracts and a $2.9 billion loss in credit expenses, according to a filing with the Securities and Exchange Commission.

``We are working through the toughest housing and mortgage markets in a generation,'' Fannie Mae CEO Daniel Mudd said in a statement.

Fannie Mae increased its estimates for credit losses and said home prices will decline more than its previous forecast, boosting costs for the $2.3 trillion of mortgages that the company owns or guarantees.

Fannie Mae raised its estimates for credit losses this year to a range of 11 basis points to 15 basis points from a range of 8 basis points to 10 basis points.

The company has lost more than half its market value in the past year as the housing slump deepened.