Fannie Mae Loses Billions in Q4
Government-backed lender off $3.56B, but feds lifts restraints on portfolio
By Kevin Spak,  Newser Staff
Posted Feb 27, 2008 10:48 AM CST
The Fannie Mae building in Washington, Wednesday, May 2, 2007, in Washington. (AP Photo/Manuel Balce Ceneta)   (Associated Press)
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(Newser) – Fannie Mae reported huge fourth-quarter losses today, painting an ugly picture both of the economy and the mortgage giant's own future. The company lost $3.56 billion—triple what analysts expected, Bloomberg reports. Derivatives were the big culprit, accounting for $3.33 billion in losses, but the company also reported spikes in late payments and delinquencies.

However, the ability of Fannie Mae and fellow mortgage-financier Freddie Mac to file 2007 statements on time allowed a federal agency to relax a cap on their investment portfolios instituted in the wake of accounting troubles. Fannie Mae remains down on the immediate future, though: "We expect the housing market to continue to deteriorate and home prices to continue to decline," a statement said.