London - AFP
US mortgage giant Fannie Mae lost nearly $5.1 billion in the third quarter, a 76 percent rise from the previous quarter and nearly four times the year-earlier period, the company reported Tuesday. The state-owned housing lender said it would ask the US Treasury for another injection of $7.8 billion, covering both losses and the amount of dividends it is obliged to pay the government for its rescue in 2008. Fannie blamed the quarterly results equally on $4.5 billion in losses on pre-housing crisis lending and $5.5 billion worth of losses on derivatives taken out during the quarter against the risk of higher interest rates. Against that, it said it had earned $5.5 billion in net revenues. "The decline in interest rates during the third quarter had a significant impact on the company's derivative losses," it said. Fannie Mae, along with its sister Freddie Mac, buy up and guarantee the vast majority of mortgages taken out by US homeowners. The two were bailed out and taken over by the government in 2008, at a cost of some $184 billion. By far the leading player in the US mortgage business since the crisis, Fannie Mae said it had provided $2.1 trillion in liquidity to the struggling housing market in the first nine months of the year, through purchases and guarantees ofmortgage loans. Last month the White House said it would press Fannie and Freddie to cut fees and lower some loan standards to give a further boost to home buying and refinancing, in hopes of boosting the overall economy.