Due to the fact mortgage company discloses intends to raise $7 billion
(Fortune) — Could Fannie Mae function as next large economic business to announce vast amounts of bucks of market losings on bonds supported by distressed mortgages?
That undoubtedly seems feasible following the government-sponsored mortgage giant announced plans Tuesday to bolster money by offering $7 billion of the latest stock and cut its dividend by 30%. In a statement Tuesday regarding the money plan, Fannie Mae stated it encountered a variety of mortgage-related losings, including market losings in the securities it holds.
The great majority of Fannie Mae’s mortgages are loans to borrowers with good credit, but within the last 5 years the federal government sponsored enterprise became confronted with mortgages which were designed to people who have woeful credit – subprime mortgages – also to mortgages which were fashioned with incomplete documents of borrowers’ earnings, called Alt-A mortgages in industry parlance. (more…)