WASHINGTON - Mortgage giant Fannie Mae said Wednesday that it lost money in its fourth quarter and is asking the federal government for $4.57 billion in aid to cover its deficit.

Washington-based Fannie said it lost $2.41 billion in the October-December quarter, stung by declining home prices. Revenue was $4.53 billion.

The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator - the Federal Housing Finance Agency - has controlled their financial decisions.

Taxpayers have spent more than $150 billion to prop up Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could top $259 billion to support the companies through 2014 after subtracting dividend payments.

Fannie has received more than $116 billion so far from the Treasury Department, the most expensive bailout of a single company.

Fannie officials say losses have increased in recent quarters for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.

When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

Fannie's October-December loss takes into account $2.6 billion in dividend payments to the government. That compares with a loss of $2.1 billion in the fourth quarter of 2010.

In November, Freddie requested $6 billion in extra aid - the largest request since April 2010 - after it reported losing $6 billion in the third quarter.

Fannie Mae and McLean, Va.-based Freddie Mac own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past few years.

Fannie and Freddie buy home loans from banks and other lenders, package them with bonds with a guarantee against default and sell them to investors around the world. The companies nearly folded more than three years ago because of big losses on risky mortgages they purchased.

The Obama administration unveiled a plan one year ago to slowly dissolve the two mortgage giants. The aim is to shrink the government's role in the mortgage system, remaking decades of federal policy aimed at getting Americans to buy homes. It would also probably make home loans more expensive.

The firms' regulator, the FHFA, submitted a plan to Congress last week that would reduce the companies' role in the mortgage market. Under the plan, Fannie and Freddie could also increase its prices to guarantee loans and establish agreements with private investors to take on added credit risk.

Exactly how far the government's role in mortgage lending would be reduced was left to Congress to decide. But all three options the administration presented would create a housing finance system that relies far more on private money.