The US mortgage giant Fannie Mae on Friday reported a first-quarter loss of $23.2 billion, compared with a loss of $25.2 billion, in the fourth quarter of 2008.

''The results were driven primarily by $20.9 billion in credit-related expenses, securities impairments of $5.7 billion, and fair value losses of $1.5 billion, as persistent deterioration in housing, mortgage, financial and credit markets continued to adversely affect our financial results,'' the company said.

The loss resulted in a net worth deficit of $18.9 billion as on March 31, 2009. In order to cover this amount the troubled mortgage company said that it has submitted a request for $19 billion from the Treasury department under the terms of the 'Senior Preferred Stock Purchase Agreement' (SPSPA) between Fannie Mae and the Treasury.

''Due to current trends in the housing and financial markets, we expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from the Treasury,'' the company said in its quarterly report.

On March 31, 2009, the Treasury provided Fannie Mae with $15.2 billion under the terms of SPSPA to cover its net worth deficit as on December 31, 2008.

Consequently, the aggregate liquidation preference of the senior preferred stock increased from $1 billion to $16.2 billion as on March 31, 2009.

It will increase to $35.2 billion upon the receipt of funds from the Treasury to eliminate the first-quarter 2009 net worth deficit.

On 6 May 2009, the Treasury had increased its funding commitment to Fannie Mae to $200 billion from $100 billion, increased the size of its mortgage portfolio allowed under the agreement by $50 billion to $900 billion, and enhanced its allowable debt outstanding to $1,080 billion.

Although the company's first-quarter net loss was less than its fourth-quarter loss of $25.2 billion, it is more than 10 times the $2.2 billion net loss reported by the company for the first quarter of 2008.

Fannie Mae said it is continuing its efforts to support the housing market both by working with lenders, loan servicers and the government to help homeowners avoid foreclosure and by providing liquidity to the mortgage market.

The company's net revenue fell 8 per cent in the first quarter of 2009 to $5.2 billion from $5.6 billion in the fourth quarter of 2008.

Its net interest income for the first quarter was at $3.2 billion, up 21 per cent from $2.7 billion in the fourth quarter of 2008, due to lower funding costs, which more than offset a decline in the average yield on interest-earning assets.

Fannie Mae has imposed a moratorium on foreclosures for most of the quarter. But that failed to stop foreclosures from increasing, compared to the prior quarter.

Total nonperforming loans were at $144.9 billion as on March 31, 2009, compared with $119.2 billion on December 31, 2008, and $10.9 billion on March 31, 2008. The carrying value of our foreclosed properties was $6.4 billion, compared with $6.6 billion on December 31, 2008, and $4.6 billion on March 31, 2008.

Net investment losses were at $5.4 billion in the first quarter of 2009, compared with losses of $4.6 billion in the fourth quarter of 2008.

Meanwhile, its net fair value losses were at $1.5 billion in the first quarter of 2009, compared with $12.3 billion in the fourth quarter of 2008. Derivatives fair value losses of $1.7 billion were primarily attributable to its option-based derivatives, partially offset by net fair value gains on interest rate swaps.

The company said it acquired 25,374 single-family homes through foreclosure in the first quarter of 2009, compared with 20,998 in the fourth quarter, 2008.

The mortgage portfolio of many banks and financial institutions was experiencing increases in delinquency and default rates due to economic down turn, coupled with rise in unemployment and falling home prices.

Fannie Mae on Wednesday said it sold $2 billion in bills at higher interest rates compared with sales of the same maturities than a week ago.

In April, the company had revamped its top order elevating chief operating officer Michael J Williams as its new chief executive.

The former CEO, Herbert M Allison, Jr, was then shifted to the Troubled Asset Relief Program (TARP) to oversee the $700 billion financial rescue fund.