Fannie Mae Posts $3.6 Billion Loss in the Fourth Quarter

Washington, D.C.–Government-backed mortgage company Fannie Mae said Wednesday that it had lost $3.6 billion in the fourth quarter of 2007, the Washington Post reports.This year’s loss–$2.1 billion–was related to mortgage defaults, declining home prices and “extraordinary disruptions in the credit markets,” according to Fannie Mae chief executive Daniel H. Mudd. Last year, Washington, D.C.-based Fannie Mae posted a profit of $604 million in the fourth quarter and a $4.1 billion annual profit.Fannie Mae–which had previously predicted home prices would drop 10 to 12 percent–now forecasts a 13 to 17 percent fall in home prices before the housing market rebounds.