D.C.-based Fannie Mae (FNM) is having a difficult time turning itself around. The mortgage-finance co., which operates under a federal conservatorship, has asked the Treasury Dept. for a $19 billion capital injection raising the possibility that its survival may be dependent on continued government funding, Bloomberg news service reported on Friday.
From Bloomberg: Fannie Mae, which took $15.2 billion in aid on March 31, cited the “unprecedented” housing market slump and government- mandated programs that are creating “conflicts in strategic and day-to-day decision making,” according to company filings today with the SEC.
Fannie Mae’s decision to tap an additional $19 billion in aid will raise its annual dividend payments to the Treasury to $3.5 billion from $1.6 billion. The company said its commitment to pay those dividends, the likelihood of seeking more aid and the deteriorating housing market creates “significant uncertainty as to our long-term financial sustainability.”
Fannie said its net worth fell to negative $18.9 billion as of March 31, from negative $15.2 billion on Dec. 31. The co. has a $200 billion federal funding commitment from the Treasury.