Fannie Mae sees sharper home-price declines, loses $2.2B
WASHINGTON — The steeper slide in home prices is accelerating the pace of foreclosures, Fannie Mae said Tuesday as it outlined plans for shoring up its finances following a $2.2 billion first quarter loss.
While the nation’s largest buyer of home loans will slice its dividend and attempt to raise $6 billion, mostly by issuing new shares, federal regulators loosened Fannie’s capital requirements as the government looks for ways to bolster the housing market.
Moody’s Investors Service downgraded the company’s financial strength rating because of the potential for further losses from soured home loans over the next two years, but investors pushed Fannie’s shares higher, in anticipation of the bigger role Fannie will play in the mortgage market.
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Fannie Mae reported a larger-than-expected first-quarter loss of $2.2 billion, and said it plans to lower its dividend and raise $6 billion in additional capital. But it also estimated its market share increased to about 50 percent of the new single-family mortgage related securities issued. Fannie Mae shares rebounded to rise $1.68, or 5.9 percent, to $29.97.
http://www.katc.com/Global/story.asp?S=8279190
Filed under: Fannie Mae, Foreclosures
