Fannie Mae sinks deeper in US housing meltdown
Sunday, 10 August 2008
WASHINGTON, Aug 9 (AFP): Struggling mortgage finance giant Fannie Mae unveiled yesterday a steeper-than-expected quarterly loss and announced dramatic measures to weather the worst US housing slump in decades.
Fannie Mae reported a net loss of 2.3 billion dollars in the second quarter that followed a first-quarter loss of 2.2 billion dollars.
The second-quarter loss of 2.54 dollars per share was more than triple the 69 cents forecast by most analysts.
Fannie Mae plans to slash its dividend, raise fees and end home loans known as Alt-A, considered riskier than prime loans but less risky than the subprime loans at the epicenter of the housing market crisis.
The company blamed the second-quarter losses mainly on a sharp hike in its provision for credit losses in the deepening housing slump.
The market has been in freefall since early 2006 after the collapse of a speculative housing boom fed by easy credit.
Fannie Mae reported a net loss of 2.3 billion dollars in the second quarter that followed a first-quarter loss of 2.2 billion dollars.
The second-quarter loss of 2.54 dollars per share was more than triple the 69 cents forecast by most analysts.
Fannie Mae plans to slash its dividend, raise fees and end home loans known as Alt-A, considered riskier than prime loans but less risky than the subprime loans at the epicenter of the housing market crisis.
The company blamed the second-quarter losses mainly on a sharp hike in its provision for credit losses in the deepening housing slump.
The market has been in freefall since early 2006 after the collapse of a speculative housing boom fed by easy credit.