Fannie Mae suffers $2.3bn loss

Earlier this week, its sister firm Freddie Mac posted worse than expected results as the US housing market continues to deteriorate. Fannie made a loss of $2.3bn in the three months to June, after making a $2.2bn loss in the first quarter of 2008. The company made a total profit of $1.97bn in 2007. The loss was three times what analysts had expected, and the firm has chosen to cut its dividend from 0.35 cents to 0.05, while taking steps to cut costs by 10%. Fannie was forced to writedown $5.3bn in credit expenses related to bad debts as US house prices continue to crash in many areas....