Fannie Mae Reports $3.56 Billion Loss

Washington Post (02/28/08) P. D1; Hilzenrath, David S.
Citing declining home prices and growing defaults, Fannie Mae recorded a $3.56 billion loss in last year's fourth quarter versus a $604 million profit during the same period a year earlier. The government-sponsored enterprise (GSE) offered little in the way of optimism, forecasting that residential prices will continue to plunge and that its financial results will only worsen. Fannie Mae CEO Daniel Mudd lamented, "The overall economic outlook has dimmed, credit is tighter, home sales have stalled as buyers wait for prices to bottom out . . . and prices have fallen quickly in a number of states." The GSE now anticipates average peak-to-trough declines in housing prices of between 13 and 17 percent before the market rebounds, compared with its earlier projections of 10 to 12 percent.