Fannie Mae Seeks Bailout After Posting $6.5 Billion in Quarterly Losses
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WASHINGTON (Sputnik) – The US Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, on Wednesday reported losing more than $6 billion in the most recent quarter and will seek relief from the Treasury Department
“Fannie Mae reported a fourth quarter 2017 net loss of $6.5 billion,” the US-government sponsored home mortgage lender said in a financial report. “To eliminate the company’s net worth deficit, the company expects the [US] Director of the Federal Housing Finance Agency (FHFA) will submit a request to Treasury on the company’s behalf for $3.7 billion.”
The company incurred an expense of nearly $9.9 billion because credits on its balance sheet lost significant value as a result of President Donald Trump’s corporate tax cuts, the report said.
In the report, Fannie Mae President Timothy Mayopoulos said despite the one-time accounting charge the results demonstrate fundamentals of the business are “strong” and the company expects to benefit from lower tax rates going forward.
In 2008, the US Treasury Department was authorized to purchase up to $100 billion in Fannie Mae and Freddie Mac stock amid the financial collapse. Then-US Treasury Secretary Henry Paulson said the move was necessary because the institutions were critical for the United States to turn the corner on the housing crisis.
According to the US-based media reports, many US companies reported similarly large accounting charges because of the GOP’s tax reform, which took effect January 1.