Fannie Mae Profit Falls on Write-Down
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Fannie Mae’s third-quarter earnings fell 19% after the largest buyer of mortgages wrote down the value of derivatives used to protect it from interest rate swings.
The $1.38-billion write-down, brought on by the biggest quarterly drop in Treasury note yields since 1986, helped reduce net income to $994.3 million, or 98 cents a share, from $1.23 billion, or $1.19, a year earlier.
Excluding the loss, earnings rose 18% to $1.63 billion, or $1.62 a share, sending the shares to their highest level in a month. Fannie Mae shares rose $4.50 to $70.98 on the NYSE.
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