Alan Zibel for Associated Press reports the mortgage finance company is making the first request to tap the $200 billion promised by the Treasury Department to keep it and sibling company Fannie Mae (FNM) afloat after the two were seized by federal regulators more than two months ago.
The loss was mainly because of a $14.3 billion charge to reduce the value of tax assets, but also was driven by $9.1 billion in writedowns on mortgage securities, and $6 billion in credit losses because of soaring mortgage delinquency rates and foreclosures. Fannie Mae reported on Monday a $29 billion loss in the third quarter.
The mortgage company claims the economic turbulence is also affecting prime loans made to strong borrowers with good credit.
Real estate ETFs have taken a beating right alongside the market, so any plan put through by the government could help move them back into positive territory:
- Vanguard REIT (VNQ): down 39.6% year-to-date
- SPDR Dow Jones Wilshire REIT (RWR): down 40.8% year-to-date
