Fannie Mae is making bold cutbacks that will send shock waves through the mortgage market, after posting a quarterly loss Friday that was three times larger than Wall Street expected.

To slow its financial decline, the mortgage finance giant slashed its dividend to 5 cents a share from 35 cents a share and said it will eliminate loans for borrowers with solid credit scores but little proof of income or small or no down payments.

The company, which lost $2.3 billion for the quarter that ended June 30, also is raising its mortgage fees, which will be passed on to borrowers as higher interest rates or closing costs.

This entry was posted on Saturday, August 9th, 2008 at 9:55 am and is filed under Real Estate. Tags: Fannie Mae mortgage finance giant Wall Street . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.