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""Fannie Mae's"":http://www.fanniemae.com second-quarter loss narrowed significantly from the previous quarter, but still in the red, the GSE says it needs to draw another $5 billion from Treasury, bringing its tally of taxpayer-funded support to $104.8 billion since the company was placed into conservatorship.
[IMAGE]Fannie Mae reported a net loss of $2.9 billion for the second quarter of 2011, compared to a net loss of $6.5 billion in the first quarter of the year.
While an improvement from earlier in the year, the company's latest results didn't fare as well when stacked up against the year-ago numbers. In the second quarter of 2010, Fannie recorded a $1.2 billion net loss.
According to the Washington, D.C.-based ""company's earnings report"":http://www.fanniemae.com/media/pdf/newsreleases/q22011_release.pdf;jsessionid=TS0HVF3X22VUNJ2FQSISFGQ, net loss in the second quarter of 2011 reflected $6.1 billion in credit-related expenses, substantially all of which were related to its legacy, pre-2009 book of business.
[COLUMN_BREAK]Fannie Mae attributed the deficit to ""continued weakness in the housing and mortgage markets,"" compounded by unemployment and prolonged price declines, but then the GSE also cited its pursuit of loans modifications as a key contributor to its losses.
During the second quarter of 2011, Fannie Mae completed more than 80,000 single-family loan workouts. These actions included more than 59,019 permanent modifications, repayment plans, and forbearances; and 21,176 short sales and deeds-in-lieu.
The GSE acquired 53,697 REO homes through foreclosure over the three-month period, adding to the 153,224 it already had on its books at the start of the quarter. During the April-to-June timeframe, 71,202 Fannie Mae-owned REOs were sold.
The company ended the period with an inventory of 135,719 single-family foreclosed REOs. The carrying value of the GSE's REO portfolio was $12.5 billion.
Forty-seven percent of Fannie Mae's single-family guaranty book of business as of June 30, 2011 consisted of loans it had purchased or guaranteed since the beginning of 2009. The company says its new single-family book of business has a strong overall credit profile and is performing well.
""We are focused on reducing taxpayer exposure by limiting our credit losses and building a strong new book of business,"" said Michael J. Williams, president and CEO. ""Our new book of business is now nearly half of our overall single-family book and we expect these new loans will be profitable over their lifetime.""
