The country’s largest mortgage funding provider, Fannie Mae, has reported a total net loss of $14.8 billion in the second quarter of 2009, marking the eighth consecutive quarter it reported a loss.

The $14.8 billion loss is much higher compared to the $2.3 billion loss reported in the second quarter of 2008 and is lower than the $23.2 billion loss reported in the first quarter of this year.

Total credit-related costs in the second quarter dropped from the total credit costs of $20.9 billion in the first quarter, but the lingering effects of defaults and foreclosed for sale inventories still put total credit costs at the high level of $18.8 billion.

Fannie Mae explained in its report that the negative effects of the nearly three-year drop in home prices have been worsened by the continued rise in unemployment, increasing the rate of defaults in its portfolios of less risky home loans.

In June, Fannie Mae said that its non-performing guaranteed loans increased to $171 billion from $144.9 billion in March and from $119.2 billion in December 2008.

With the still huge losses and increased non-performing loans, Fannie Mae said it has asked the Treasury for $10.7 billion to cover its deficit, bringing the total of funds withdrawn by Fannie Mae under its preferred stock purchase facility to $45.9 billion.

Meanwhile, net interest income increased to $3.7 billion in the second quarter, an increase of 15 percent from the first quarter. Its income from mortgage guarantee fees however dropped to $1.7 billion from $1.8 billion in the first quarter.

Fannie Mae and Freddie Mac together guaranteed or owned about 50 percent of all home loans issued in the U.S. as of 2008, which amounted to $12 trillion.

Currently, the two entities are operating as government-sponsored enterprises mandated to help carry out the Obama administration’s Making Home Affordable Program. They are however losing billions from the loan refinancing and modification schemes of the program as they have to post losses when they pull out home loans that back their mortgage securities.

Fannie Mae stated in its documents filed with the Securities and Exchange Commission that there is a high level of uncertainty in its financial situation because of its housing obligations, its dividend payments and the persistent effects of the economic downturn.

In one announcement from the White House, the federal government refuted a report by Washington Post that federal officials were planning to isolate the bad debts of Fannie Mae and Freddie Mac.