Fannie Mae makes first request for U.S. Treasury cash

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Mortgage giant Fannie Mae, now under government control, is planning its first trip to the public trough for money to bolster its balance sheet because of rising loan losses.

The company today estimated it would need between $11 billion and $16 billion of government capital in the aftermath of fourth-quarter losses. The company didn’t estimate what its losses would be.

The Treasury in September took control of Fannie and its sibling mortgage firm, Freddie Mac, after the Bush administration decided the companies were in danger of failing. The Treasury agreed to extend up to $100 billion in capital to each, to keep them afloat.

Freddie got $14 billion in aid last fall, and last week said it would need as much as $35 billion more in the near term.

Until now, Fannie hasn’t asked for any money. The company warned that the actual amount it draws down from the Treasury ‘may differ materially from [the] estimate because Fannie Mae is still working through its process of preparing and finalizing’ its financial statements.

The two companies own or guarantee a total of $5 trillion in home loans.

-- Tom Petruno