Fannie Mae eyes big losses on $15bn owed by Lehman
Saturday November 07 2009
Fannie Mae, the loss-making mortgage-finance company seized by regulators, said it has $15.8bn (€10.7bn) in claims against bankrupt securities firm Lehman Brothers that it will at best partially recover.
"Based on Lehman Brothers' financial condition, we believe we will only receive a portion of these claims," Washington- based Fannie Mae said in a filing with the Securities and Exchange Commission.
The announcement came as the company posted its ninth-straight quarterly loss, of $18.9bn, and said it will need $15bn more in federal aid.
Creditor
This is the first time Fannie Mae has quantified its exposure to derivatives and trading agreements with New York- based Lehman, an underwriter of mortgage bonds that succumbed to the subprime home-loan crisis on September 15, 2008, in what was the biggest bankruptcy filing in history.
Fannie Mae's claims would make it the fifth-largest creditor, according to a list maintained by Epiq Systems, Lehman's claims' administrator.
Fannie Mae said in a bankruptcy filing last year that Lehman, once the fourth-largest US investment bank, owed it "very substantial sums".
Fannie Mae was seized by regulators about a week before Lehman's bankruptcy because of questions about its capital reserves. (Bloomberg)
Irish Independent
