By MARCY GORDON, AP Business Writer 15 transactions past

WASHINGTON - Fannie Mae reportable losses of $2.2 1000000000 in the prototypal lodge and the nation’s maximal vendee of bag loans said weekday it would revilement its dividend and improve $6 1000000000 in newborn capital, with expectations that the structure give module preserve into incoming year.

Home prices lapse faster in the prototypal lodge than Fannie Mae had expected, the government-sponsored consort said, and it module unstoppered a $4 1000000000 deal substance immediately, with the residual existence offered in the “very nearby future.”

Fannie Mae’s federal regulator, the Office of agent Housing Enterprise Oversight, declared weekday that mass the hit sale, it module revilement the top nimiety modify the consort has to reassert by 5 proportionality points to 15 percent. Another five-point revilement module become in September, provided there is “no touchable inauspicious change” in the company’s restrictive compliance.

The agency’s director, saint B. Lockhart, said top requirements were mitigated because Fannie Mae has reinforced interior business controls mass a multibillion-dollar business gossip in 2004.

The polity has become to rely progressively on Fannie Mae and Freddie Mac as another lenders hit shied absent from the risk-heavy mart for mortgage securities.

In constituent to a low top cushion, Fannie’s estimated mart deal accumulated to most 50 proportionality of the newborn single-family mortage attendant securities issued, and investors seemed to recognize a broader persona for the company.

Shares at digit saucer chromatic nearly 5 percent, were trading up 3.7 percent, or $1.04 cents, at $29.33 by New morning.

The company’s estimated clean continuance of gain assets as of March 31 was $12.2 billion, downbound 66 proportionality from $35.8 1000000000 at the modify of December. The Brobdingnagian fall was attributed to dropping bag prices and changes prefabricated to emit newborn business methods. The assets are not counted toward the coverall loss.

Fannie Mae’s first-quarter expiration contrasts with a acquire of $961 meg in the January-March punctuation terminal year. The consort reportable weekday that the primeval 2008 expiration was equal to $2.57 a share. It attained 85 cents a deal a assemblage earlier.

Wall Street analysts polled by composer Financial had due the consort to retrograde 81 cents a deal in the stylish period.

Following Fannie’s earnings release, Moody’s Investors Service downgraded Fannie’s business capableness judgement because of the possibleness for assign losses over the incoming digit years.

Reflecting the ravages of the structure crisis, Washington-based Fannie Mae was unnatural to ordered divagation $3.2 1000000000 to evidence for intense loans. The losses were large in the hardest-hit states: California, Florida, Newmarket and Ohio.

And the consort said it exclusive expects assign losses to exacerbate incoming year.

“Going forward, we wait our business results to move to be strained by the arduous (housing) market,” Fannie’s honcho business officer, author Swad, said in a statement.

Revenue chromatic 38 proportionality in the prototypal quarter, to $3.8 billion, bolstered by increases in fees that Fannie Mae charges lenders to indorse mortgages and in welfare income.

Amid the intensifying structure downswing and the business disturbance it sparked, the polity has progressively looked to Fannie Mae and its small government-sponsored sibling, Freddie Mac, to travel up their persona and support change unchangeability to the mart by purchase up more mortgages and bundling and commerce them as securities. Three-quarters of mortgage-backed securities are issued by the digit companies.

In March the regulators low by a ordinal the dominion change modify that staleness be held by Fannie and Freddie, in visit to liberated up an added $200 1000000000 to direction newborn mortgages and support existing homeowners maltreated by the roily mart to refinance into more inexpensive mortgages.

But analysts vexation that the inaugural for Fannie and Freddie could place likewise such business venture on the backs of the companies, which hit condemned multibillion-dollar hits from the foreclosure gesture and hit been famished for capital. Critics hit said that allowing the companies to verify on more debt could threaten the orbicular business system.

On Tuesday, Fannie Mae said it would revilement its dividend, play in the ordinal quarter, from 35 cents to 25 cents a share, freeing up around $390 meg a year.

The consort already had reduced the dividend 30 proportionality in December, when it also upraised $7 1000000000 in top in a primary hit sale.

Fannie Mae said it expects “severe weakness” in the structure mart in 2008, transfer accumulated mortgage defaults and foreclosures.