Fannie Mae Wins Cheers Despite Loss

New York Times (05/07/08) P. C1; Duhigg, Charles
Not only did Fannie Mae announce a $2.2 billion quarterly loss and a dividend reduction this week, it cautioned of potentially bigger losses in the months to come. Investors, though, continued to bid up the government-sponsored enterprise's stock on the belief that the GSE is well-positioned to select from the best and safest loans now in the marketplace. Still, some federal legislators remain concerned about Fannie Mae's overall financial health. Some lawmakers want Fannie Mae and Freddie Mac to buy more and riskier loans to bolster the nation's housing market, while others are preaching a more conservative approach to ensure the two GSEs won't record even greater losses.