Mortgage financing GSE Fannie Mae reported losses attributable to common shareholders of $5.2 billion in the second quarter, and said it would ask for $5.1 billion more in taxpayer dollars upon a weak housing market and continued losses on loans made before 2009.
The second quarter earnings outlook, released Friday, also forecast weakness ahead and continued downward pressure on home prices due to unemployment and foreclosures.
While Fannie Mae announced in December it would no longer acquire newly originated reverse mortgage loans, it noted in its second quarter earnings report that securitizations increased in the second quarter and first half of 2011 compared with the second quarter and first half of 2010 primarily due to the securitization of $9.3 billion of existing reverse mortgage whole loans from its Capital Markets group’s portfolio. The securitization was of a Real Estate Mortgage Investment Conduit (REMIC) consisting of $9,255,811,613 HECM loans originated by Bank of America, and took place in May. Fannie Mae held the securities at the second quarter’s close.
During the quarter, Fannie Mae paid back $2.3 billion in dividends to taxpayers. Since it was initially bailed out and taken over by the Treasury in 2008, it has requested roughly $104 billion in the form of government capital and has paid back $14.7 billion in dividends.
The second quarter loss follows an $8.7 billion decline in the first quarter and and exceeds losses of $3.13 billion in Q2 2010.
Written by Elizabeth Ecker