Fannie Mae to Tap $19 Billion in Treasury Capital
May 8 (Bloomberg) — Fannie Mae, operating under a federal conservatorship, asked the U.S. Treasury for a $19 billion capital investment and raised the possibility that its long-term survival may be dependent on continued government funding.
Fannie Mae, which took $15.2 billion in aid on March 31, cited the “unprecedented” housing market slump and government- mandated programs that are creating “conflicts in strategic and day-to-day decision making,” according to company filings today with the Securities and Exchange Commission.
The first-quarter net loss widened to $23.2 billion, or $4.09 a share, pushing Fannie Mae’s net worth below zero for the second time. The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees deteriorated amid the yearlong economic recession and as the government forced the company to help struggling homeowners refinance or modify their loans.
