The semi-public mortgage financing giant Fannie Mae said Friday it would seek an additional $5.1 billion from the US government, following a steep quarterly loss. Fannie Mae said it lost $2.9 billion in the second quarter of 2011 as high unemployment and a prolonged slump in the US housing market continued to chew away at its mortgage portfolio.
"The loss in the second quarter of 2011 reflects the continued weakness in the housing and mortgage markets," Fannie Mae said in a statement. In addition, Fannie Mae needed to make $2.3 billion in dividend payments to the US Treasury, leaving it with a net worth deficit of more than $5.0 billion. The US Federal Housing Finance Agency "will submit a request to Treasury on Fannie Mae's behalf for $5.1 billion to eliminate the company's net worth deficit," Fannie Mae said.
Fannie Mae, along with its peers Freddie Mac and Ginnie Mae, guarantee the vast majority of mortgages taken out by US homeowners. During the financial crisis of 2008, the US government moved to guarantee the debt of Fannie Mae after a sharp downturn in the American housing market triggered severe losses for the mortgage giant.
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