FNMA/Fannie/Fannie Mae’s 1st Quarter Results Showed a Loss of $2.2 Billion

In another blow to brokers, it was announced last week that Countrywide closed 16 wholesale loan centers. This, of course, re-ignited the discussion of what Bank of America will do with Countrywide’s three business channels: retail, wholesale, and correspondent. Generally speaking, retail is viewed as “the surest thing”, but there are definitely reasons for BofA to keep the other two channels in one form or another.

FNMA/Fannie/Fannie Mae’s 1st quarter results showed a loss of $2.2 billion, considerably worse than consensus estimates. Where did the loss come from? Many think that Fannie Mae only is involved in prime mortgages, but 43.0%, or $946 million, of the $2.2 billion in losses incurred during the first quarter involved Alt-A loans. They also said that the company's "Alt-A book will continue to drive an outsize portion of our overall credit losses." Fannie also reported $344.6 billion current Alt-A exposure and a limited strategy for stemming future losses.

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