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Nov. 8 (Bloomberg) -- Fannie Mae, one of two mortgage companies operating under U.S. conservatorship, said it will seek $7.8 billion in Treasury Department aid after reporting a third-quarter loss.
The company had a net loss of $5.1 billion for the three- month period that ended Sept. 30, driven by defaults on loans made before 2009 and derivative losses linked to a decline in interest rates, according to a Securities and Exchange Commission filing.
“Fannie Mae is working to reduce losses on our legacy book and limit taxpayer exposure,” Susan McFarland, the company’s executive vice president and chief financial officer, said in a statement.
The third-quarter loss was up from $3.5 billion a year earlier. In August, the company reported a $2.9 billion, second- quarter loss.
Fannie Mae, based in Washington, and smaller rival Freddie Mac of McLean, Virginia, have survived on Treasury aid since they were seized by the federal government in September 2008 amid losses stemming from the collapse of the subprime mortgage market.
The $7.8 billion aid request reported today includes $2.5 billion that will be repaid to Treasury in the form of dividends on the U.S. stake. The borrowing brings Fannie Mae’s draw to $112.6 billion, of which $17.2 million in dividends has been returned.
--Editors: Gregory Mott, Dan Reichl
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