Monday, Nov 10, 2008
Fannie Mae, the largest provider of funding for U.S. residential mortgages, on Monday said it lost a record $29 billion in the third quarter as the company wrote down a tax-related asset that has its buoyed capital.
The quarterly loss is the fifth consecutive for the Washington-based mortgage finance company that has been operating under a government conservatorship since September.
Fannie Mae in October warned it would write down “substantially all” of its deferred tax assets, which had become a controversial addition to capital as losses mounted.
Deferred tax assets can be used to offset future taxes, but only if the company can show it will return to profitability.
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Credit expenses soared to $9.2 billion in the quarter due to deteriorating mortgage credit conditions and as home prices declined, the company said in a statement.
Fannie Mae’s loss equaled $13 per share, compared with a loss of $1.4 billion, or $1.56 per share a year earlier.