Fannie Mae will request another $4.6 billion in U.S. government aid after posting a $2.41 billion loss in the fourth quarter, the mortgage finance company said Wednesday.
The company also warned it could be required to request additional aid stemming from an escalating battle with Bank of America Corp. over mortgage-repurchase requests.
Fannie Mae blamed its quarterly loss primarily on pre-2009 loans and declines in home prices, which pushed up the company's credit-related expenses.
In the fourth quarter of 2010, Fannie Mae posted a slight profit to snap a streak of 13 straight quarterly losses, though the company resumed its place in the red in the following quarter and each since.
Fannie Mae and sister company Freddie Mac don't lend to consumers. Rather, they buy and guarantee home loans that meet their standards and package them into securities.
The two firms were taken over by the government in 2008 at the height of the financial crisis. The companies' shares began trading on the over-the-counter market in 2010 after regulators ordered them to delist from the New York Stock Exchange because they no longer met listing standards.
Including its most recent request from the Treasury Department, Fannie Mae has borrowed more than $116 billion from taxpayers and paid back $19.6 billion in dividends. Freddie Mac, which hasn't yet reported earnings, has received more than $71 billion in government aid and paid back about $15 billion as of the third quarter.
The net cost to taxpayers for the bailouts of both companies stands at more than $152 billion.
For the fourth quarter, Fannie posted a loss of $2.41 billion, compared with a year-earlier profit of $73 million. Net revenue declined 7.3% to $4.53 billion.
The firm's credit-related expenses totaled $5.51 billion in the fourth quarter, compared with $4.32 billion a year earlier and $4.88 billion in the third quarter.
Last week Bank of America disclosed in a regulatory filing that it had slowed the pace of loan sales to Fannie Mae, citing a disagreement over Fannie Mae's requests that it buy back soured mortgages.
The volume of Fannie Mae's outstanding repurchase requests with Bank of America "increased substantially" as a result of the bank slowing its loan buy-backs, Fannie Mae said in a press release Wednesday. Bank of America accounted for about 52% of the Fannie Mae's outstanding requests as of Dec. 31.
Fannie Mae said it is taking steps to address the issue. It didn't renew an existing loan delivery contract with Bank of America at the end of January, which "significantly restricted the types of loans they can deliver to Fannie Mae." However, Bank of America can still deliver loans under certain refinancing programs.
"If Fannie Mae collects less than the amount it expects from Bank of America, Fannie Mae may be required to seek additional funds from Treasury," Fannie Mae said.
However, Fannie Mae doesn't expect the change by Bank of America to have a material impact on its results.
