| FNMA Hurt by Exposure To Manufactured-Home Loans |
| Monday, 17 November 2003 | |
|
Monday, November 17,
2003 Fannie Mae had losses of $237 million from soured mortgage investments during the first nine months of 2003, with nearly half of the losses coming from its portfolio of manufactured-housing loans, according to a new federal filing. The losses, while extremely small compared with the company's overall mortgage business, highlighted recent concerns among investors about Fannie Mae's exposure to the struggling manufactured-housing sector. Fannie Mae owns about $9 billion in securities backed by manufactured-housing loans, out of an overall portfolio of about $900 billion in investments. In third-quarter financial statements filed Friday with the Securities and Exchange Commission, Fannie Mae said it had recognized impairments of $101 million this year from manufactured-housing securities, many of which have been downgraded by the major credit-ratings agencies. The company didn't specify which securities accounted for its other losses. The year's total impairment of $237 million compares with the $47 million Fannie Mae recorded during the first nine months of 2002. Fannie Mae is a publicly traded, government-chartered company that buys mortgages and mortgage-backed securities to boost the flow of capital through the U.S. mortgage market. The company bought manufactured-housing securities to book profits and to make it easier for consumers to purchase mobile homes, popular among low-income families. The manufactured-housing sector has struggled lately because of a glut of mobile homes and rising foreclosures due to loose credit standards. Analysts generally agree that Fannie Mae's manufactured-housing investments aren't big enough to jeopardize the company's long-term financial health. Some worry that losses could become large enough to hurt earnings in the short run. A Fannie Mae spokesman said management doesn't believe any potential future impairments will have a materially adverse impact on the company's operating results. Write to Patrick Barta at patrick.barta@wsj.com If you currently do not have access to our web site, you can
request a sign-on login to our demo website by clicking on the
following link: |
