Fannie Mae Takes a Spanking

Today is not a good day for Fannie Mae (sorry, couldn’t help stop the poet in me). Fannie Mae took a beating in the final quarter of 2007, losing roughly $3.6 billion dollars–another casualty of mounting home loan delinquencies.

Fannie Mae, which is the big boy on the block when it comes to buying and backing home loans, will likely see a drop in its share price of about $1.24, according to Wall Street analysts. About this time last year, however, and no suprise to anyone, FNM earned 49 cents a share.

Fannie Mae’s president, Daniel Mudd (an apt name for the current situation), speaking on the bad times faced not only by Fannie Mae but by the industry in general, said “We are working through the toughest housing and mortgage markets in a generation…the significant decline in home prices in a number of large regional markets and the growing number of borrowers struggling with their mortgages.”

Fannie Mae’s losses for 2007 total just over $2 billion dollars, and for 2008 the trend appears to continue. Stay tuned, folks. If you’re buying or selling a home, strap yourselves in. The ride is definitely not over, and doesn’t look to be in the near future.