Fannie Mae suffered a $29 billion loss in the period, compared with a $1.4 billion loss in the same time span last year. The company attributed losses primarily to a $21.4 billion writedown on the value of deferred tax assets. Fannie Mae also suffered a $9.2 billion charge for new provisions for credit losses related to the continued decline in mortgage credit conditions and falling home values.
Exposure to Alt-A mortgages was responsible for 48% of the company's credit losses in the quarter.
According to AIG chief executive Edward Libby, the insurer's $24.5 billion loss in the third quarter was a result of "extreme dislocations and volatility in the capital markets and significant charges related to restructuring activities".
This result compares with a $3.09 billion gain in the same time period last year.
Following the losses, the US Treasury Department announced it would revise the terms of the bail-out plan, allocating an additional $150 billion in federal funds to the embattled insurance giant.
As a part of the restructuring plan, the government will take a $40 billion equity stake in the company.
The week on Risk.net, October 6-12, 2017Receive this by email