Fannie Mae Hopes To Post Better Profit After Grim 2Q Results,

New York, NY (AHN) - Traders on Friday were disappointed with the mortgage finance giant Fannie Mae's weak second quarter report.

The beleaguered firm posted larger-than-expected loss in the three month period ending June 30.

The latest report from the troubled lender showed further signs of slumping housing and weakening credit market condition, offsetting the positive news from MBIA.

The beleaguered firm, which have found difficult to raise fresh capital enough to shore up its weakened balance sheet, reported a net loss of $2.3 billion, or $2.54 a share.

The market analysts on Wall Street had projected a loss of 68 cents a share as the firm reported profit of $1.95 billion, or $1.88 a share, in the same quarter a year ago.

The firm also reported that it will slash its quarterly dividend to 5 cents on each share, which is down by 86 percent from its previous level.

Fannie Mae and Freddie Mac, which support $5 trillion in home loans out $12 trillion in total, were trading at about $60 a year ago.

But the market analysts are speculating that the landmark housing bill signed into law last week by President Bush will help the mortgage lending giant in the following quarters.

The U.S. Senate voted 72 to 13 in favor of the bill that offers up to $300 billion in loan guarantees for homeowners to get cheaper loans.