US federal mortgage-finance company Fannie Mae said it will seek $15 billion in US Treasury aid and sell $2.6 billion in unused tax credits after posting its ninth straight quarterly loss.
A third-quarter net loss of $18.9 billion pushed Fannie Mae to request its fourth draw on a $200 billion government lifeline, according to a Securities and Exchange Commission filing today.
The Washington-based company said it reached an agreement to sell the low-income housing tax credits to avoid impairments when the credits expire.
The Treasury, which has yet to approve the sale, is considering whether to let Goldman Sachs Group buy some of the credits. Goldman Sachs could use the deal to lower its tax bill.
Fannie Mae has accumulated about $5.2 billion in the credits and has not been able to recognise the majority of the tax benefits because it hasn't been profitable since 2007.
Fannie Mae, which owns or guarantees more than 20 per cent of the $12 trillion US home-loan market, has been hobbled by a three-year housing slump that has wiped 28 per cent off home values nationwide and led to record foreclosures.
Chief Executive Michael Williams said on September 9th the housing market still has a "long road ahead" to recovery and investors and borrowers should remain cautious.
"We are dependent on the continued support of Treasury in order to continue operating our business," Fannie Mae said in the filing today, citing "trends in the housing and financial markets."
Fannie Mae, which posted $101.6 billion in losses over the previous eight quarters, has already taken $44.9 billion in federal aid since April.
A record 2.6 million defaults, scheduled foreclosure auctions or bank repossessions occurred in the first nine months of this year, 22.1 per cent more than a year earlier, as unemployment rates climbed and temporary programmes delaying foreclosure expired, according to data company RealtyTrac.
Bloomberg