Sweeping changes to U.S. tax law led to a $6.53 billion loss at Fannie Mae last quarter, putting the government-controlled mortgage company in the position of seeking cash assistance from taxpayers for the first time since it emerged from the housing crisis six years ago.
Fannie Mae said Wednesday its net worth sank to a negative $3.7 billion after it had to “remeasure” its deferred tax assets to the tune of $9.9 billion as required by the Tax Cuts and Jobs Act, signed into law by President Donald Trump just before the end of the year.
Due to the tax charge, Fannie Mae reported 2017 net income of $2.46 billion for 2017, down from $12.31 billion in 2016. But its pretax income was $18.45 billion, slightly better than the $18.33 billion in 2016.
Many U.S. companies had similarly large accounting charges because of the new Republican tax law, which took effect Jan. 1.
“Our 2017 results demonstrate that the fundamentals of our business are strong,” said Fannie Mae President and CEO Timothy Mayopoulos. “While the fourth quarter was affected by a one-time accounting charge, we expect to benefit from a lower tax rate going forward.”