By Vicki Needham - 08/05/10 11:02 PM EDT
Government-controlled mortgage giant Fannie Mae requested on Thursday $1.5 billion more in government help because of its second quarter losses.
Despite seeing losses shrink significantly from April through June, the best report in three years, the mortgage giant recorded net losses of $3.1 billion including $1.2 billion in losses on top of another $1.9 billion in dividends it must pay to the Treasury Department, according to a Fannie release today.
"Across our industry, we are seeing a more realistic approach to housing and lending that bodes well for the future."
The $1.2 billion net loss in the second quarter, 55 cents a share, is down significantly from the first quarter net loss of $11.5 billion, the best earnings report since the government took over the firm nearly two years ago, the company said in a release.
It's also an improvement over a $15.2 billion loss, or $2.67 a share, in the second quarter of 2009.
Fannie has already received $84.6 billion in help from the Treasury Department and that will increase to $86.1 billion when it receives the $1.5 billion request.
Combine that with Freddie Mac and the two mortgage firms that own about half of the nation's mortgages valued $5 trillion, have received nearly $147 billion in federal aid to avoid collapse.
"The company does not expect to earn profits in excess of its annual dividend obligation to Treasury for the indefinite future," Fannie said in a statement.
Fannie Mae credited the improvement with loans performing well, including customers paying their bills on time, while its credit-related expenses decreased by more than $7 billion.
The company has blamed most of its losses on bad loans made between 2005 and 2008 as the housing market surged then crashed. Fannie faced political pressure to expand homeownership and pressure from Wall Street to back riskier loans.
When the market crashed, Fannie needed government intervention.
The company increased its standards in 2009 and hasn't seen many defaults on mortgages since then.