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JP Morgan Takes A $600 Million Writedown In Fannie and Freddie Preferred

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JP Morgan Chase estimated that its holdings of Fannie Mae and Freddie Mac preferred stock lost about half of their value the third quarter now underway, according to a regulatory filing with the Securities and Exchange Commission. JP Morgan says it owns preferred shares of Fannie and Freddie with a $1.2 billion par value that has been written down by $600 million.
"The precise amount of losses that may be incurred on these securities for the third quarter is difficult to determine, given the significant volatility being experienced in the market values of these securities," JP Morgan notes.
This move should also trigger writedowns at other financial firms, including regional banks and insurers, who hold the majority of Fannie and Freddie preferred shares.
JP Morgan 8-K [SEC]