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Fannie Mae, the taxpayer-owned company that is the nation’s largest mortgage lender and insurer of new mortgages, lost $6.5 billion in the first four months of 2011, according to the company’s latest financial report. That’s a big change from the previous quarter, when Fannie Mae made $73 million in profit.

The loss was due mostly to a 1.8% decline in home prices nationally. That increased Fannie’s credit-related expenses, which means the company received less income from mortgages and paid more to borrow money.

And the rest of 2011 will be more of the same.

“We expect our credit-related expenses to remain elevated in 2011 as we continue to be negatively impacted by the prolonged decline in home prices,” Michael J. Williams, Fannie’s CEO, said in a press release.

The latest financial report is a window into the world of the nation’s largest financial institutions, most of which are still burdened with millions of risky mortgage loans they made during the last few years of the housing bubble. Fannie Mae owns $206 billion worth of “non-performing” loans on single-family houses, meaning the homeowners aren’t making any payments.

[Related article: Federal Fannie and Freddie Changes Likely Won’t Come Soon]

The vast majority of those loans were made or insured between 2005 and 2008, according to the report. Fannie expects to lose $120 billion on loans it either made or insured during those four years. So far, taxpayers have spent $99.7 billion to bail out Fannie. As of March 31, the company still had a deficit of an additional $8.4 billion; the Federal Housing Finance Agency, which oversees Fannie and its cousin Freddie Mac, has requested another $8.5 billion from the Treasury on Fannie’s behalf.

Meanwhile, the company is trying to modify some mortgages, helping to keep homeowners in their houses while hopefully guaranteeing future revenue for Fannie. The company modified 51,043 mortgages in the first quarter, and granted another 9,916 homeowners forbearance to delay foreclosure in the hopes that a new payment plan may be worked out.

But that wasn’t nearly enough to help everyone. During the last four months, Fannie bought 53,549 single-family homes that had fallen into foreclosure. That means Fannie now owns 153,224 houses across the country, together valued at $14.1 billion, according to the report.

[Related article: New Rewards, Penalties for Mortgage Mods]

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