Business

Fannie Mae asks for $8.4bn in aid

Fannie Mae building
Image caption Fannie Mae plays a key role in the US housing sector

US mortgage finance firm Fannie Mae has asked for another $8.4bn (£5.6bn) in state aid after announcing further big losses.

The company said it lost $13.1bn in the first three months of the year as it continues to suffer the effects of the financial crisis.

That is down from the $16.3bn loss it reported for the last quarter of 2009.

But the continued fragility of the US economy and mortgage market meant it still needed government support.

The US government took control of the two mortgage funding giants - Fannie Mae and Freddie Mac - in 2008.

The companies buy mortgages from approved lenders and sell them on - making them especially vulnerable to the collapse in the US mortgage market that sparked the crisis in the banking sector.

So far the government has contributed $83.6bn to the bail-out of Fannie Mae. The cost of bailing out both institutions now totals nearly $145bn - but is expected to total much more.

Fannie Mae said it saw "no end in sight" for government financial assistance.

Earlier this month, Freddie Mac asked for a further $8bn, saying that the US housing market remained fragile.

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