Fannie Mae posts another huge loss

By Lynn Adler NEW YORK (Reuters) - Fannie Mae on Friday posted a much larger-than-expected second-quarter loss and slashed its dividend more than 85 percent to preserve capital as home loan defaults accelerated in the bleakest U.S. housing market since the Great Depression. Three weeks after U.S. authorities took sweeping steps to support Fannie Mae and its smaller sibling Freddie Mac , the two largest providers of funding to the U.S. mortgage market, Fannie said its credit costs will keep rising this year. It also said it will cease buying certain risky mortgages that accounted for nearly half of its credit losses in the quarter and set a year-end target for doing so. Fannie Mae, whose shares dropped more than 6 percent following the earnings news, said its loss totalled $2.3 billion (1.2 billion pounds) before preferred... [read full story]