The Associated Press: Fannie Mae loses $2.2B in 1Q, warns of severe weakness: "Fannie Mae reported losses of $2.2 billion in the first quarter and the nation's largest buyer of home loans said Tuesday it would cut its dividend and raise $6 billion in new capital, with expectations that the housing slump will persist into next year.
Home prices fell faster in the first quarter than Fannie Mae had expected, the government-sponsored company said, and it will open a $4 billion share offering immediately, with the remainder being offered in the 'very near future.'
Following the stock sale, Fannie Mae's federal regulator, the Office of Federal Housing Enterprise Oversight, will cut the capital surplus cushion the company has to maintain by 5 percentage points to 15 percent, with another five-point cut in September, provided there is 'no material adverse change' in the company's regulatory compliance."
Right now fannie mae and perhaps freddie are breathing a little life into San Diego Real estate. What happens when they keep losing billions of dollars a quarter.