Fannie Mae needs another $15 billion

Fannie Mae (FNM), the deeply-troubled supplier of mortgage capital, reported another huge loss late Thursday and said it needed $15 billion in aid from the Treasury Department.

The company owns or guarantees more than 20% of the $12 trillion home-loan market.

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The company lost $18.9 billion, or $3.47, in the third quarter -- its ninth consecutive quarterly loss.

The only good news in the number is that it was smaller than the loss it reported for the third quarter of 2008: $28.99 billion, or $13 a share.

The stock closed at $1.12 a share on Thursday and was off 11 cents after the report came out.

Fannie Mae said it had reached an agreement to sell low-income housing tax credits. It currently has some $5.2 billion in tax credits on its books but can't use them because it hasn't been profitable since 2007.

The Treasury hasn't approved the sale and is considering selling some of the credits to Goldman Sachs (GS). Wall Street's most profitable investment bank could then use the credits to reduce its tax bill.

Presumably, Goldman would buy the credits at a steep discount and then use them at face value.

Fannie Mae was taken over by the Federal Housing Finance Agency along with rival Freddie Mac (FRE) in September 2008. The takeovers was the first major event in a month that set off a global financial panic.

Fannie Mae has been repeatedly staggered by the three-year housing slump that has sliced 28% of home values nationwide and led to record foreclosures.

The housing market has started to bottom in recent months but remains quite weak.

To stay in business, the company said Thursday, it needs the continued support of the government. Indeed, with its third-quarter loss, it has a negative net worth of some $15 billion.

The government had said it would extend as much as $200 billion to keep Fannie Mae alive. Fannie has received $44.9 billion so far.

To deal with souring loans, the company said it modified 56,816 loans, nearly double the second-quarter figure.

Meanwhile, foreclosed-property acquisitions more than doubled to 98,428.

Loss reserves jumped 20% during the quarter to $64.72 billion; the prior-year figure was $15.53 billion.

The serious delinquency rate--loans at least three months past due or awaiting foreclosure--rose to 4.72% from 3.94% in the second quarter and 1.72% a year earlier.

Looking ahead, Fannie trimmed its 2009 home-price drop forecast to 6% from 7% to 12%.