Fannie Mae Reports $29 Billion Q3 Loss

Washington, DC (AHN) - Fannie Mae announced Monday it lost $29 billion in the third quarter due to a $21.4 billion tax related charge. The result marks the fifth straight quarter the residential mortgage giant has reported a loss.

The company posted a third quarter loss of $13 a share, last year it reported a loss of $1.4 billion or $1.56 a share. The result was also well below analyst estimates for a loss of $1.60.

The $21.4 billion tax related charge was to reduce the value of tax assets and was a non-cash charge. Fannie Mae had previously announced it would take a charge for tax assets as it changed the accounting practice it used, no longer deferring them.

Credit expenses jumped again, reaching $9.2 billion in the third quarter as home prices continued to decline.

The company added $6.7 billion to its loan loss reserves, bringing total reserves to $15.6 billion.

Fannie Mae reported investment losses of $1.6 billion as it was hurt by the widening of credit spreads and interest rate declines.

The company saw delinquent loans rise to 1.7 percent in the third quarter, up from 0.8 percent last year.

Fannie Mae operates under a conservatorship that allows the government to inject capital into the company. The U.S. government owns an 80 percent stake in Fannie Mae.