Fannie Delays 10-K, Says Losses Could Be Less

Troubled mortgage giant Fannie Mae said late Thursday that, once again, it could not report quarterly earnings in a timely manner, but also said its anticipated losses could be lower by about $1 billion.In a Form 12b-25 filing with the Securities and Exchange Commission, Fannie said its restatement in regard to hedge accounting (FAS 133) may be $8.4 billion, not $9 billion as previously thought. Its losses on certain "purchase and sell commitments" may be $2.4 billion, compared with an earlier estimate of $2.8 billion. Fannie, which has not reported earnings since the second quarter of 2004, is operating under a supervisory agreement with the Office of Federal Housing Enterprise Oversight. It is continuing an intense audit of its books and says it expects to restate earnings for the past three years. A new analyst report released by Smith Barney predicts that if interest rates rise, the company's anticipated losses "could shrink further in size."