MORTGAGE LENDING

Fannie Mae Meets Surplus Mandate

Fannie Mae met its mandated 30 percent capital surplus in September, said the Office of Federal Housing Enterprise Oversight. The District-based firm had a $9.1 billion surplus as of Sept. 30 after factoring in losses related to hurricanes and accounting errors, exceeding its 30 percent mandate by $752 million, OFHEO said.

DEFENSE CONTRACTS

Federal Judge Dismisses Lockheed Suit

Lockheed Martin cannot sue the Defense Department in federal court over the agency's plan to rescind the company's "direct billing" authority, which allows some contractors to bypass ordinary auditing procedures, U.S. District Judge Roger W. Titus ruled. The Bethesda-based company can file a claim under the Contract Disputes Act if it thinks the decision, which may cost it millions of dollars, is unfair. Titus dismissed Lockheed's suit for lack of jurisdiction.

MeriStar Hospitality of Arlington, a real estate investment trust that owns hotel properties, reported a loss in funds from operations of $95.7 million ($1.07 a share) in the third quarter, compared with a loss of $661,000 (1 cent) in the comparable period a year earlier. Its net loss was $117.3 million ($1.34), compared with a loss of $26.8 million (31 cents). The firm said the loss includes $92 million attributable to debt refinancing. Revenue rose 7 percent, to $192.7 million.

MCG Capital of Arlington, which provides capital to businesses, had a profit of $16.7 million (34 cents a share) in the third quarter, up 90 percent. Operating income increased almost 15 percent, to $28.4 million. The company's results fell short of Wall Street expectations, and its stock closed at $14.14 a share, down $2.38.

CapitalSource of Chevy Chase, a lender to businesses, had a profit of $28 million (24 cents a share) in the third quarter, down 18 percent. Total interest and fee income was $169.3 million, up 51 percent. The company's loan portfolio increased to $5.49 billion, up 8 percent. The company also said it intends to convert to a real estate investment trust next year.

American Capital Strategies, a Bethesda business-lending and investment company, said its third-quarter profit rose to $94.1 million (90 cents a share) from $60.6 million (74 cents). Revenue, which includes fees, interest and dividends from its portfolio of loans and investments, rose 81 percent, to $148.8 million. The firm said it would raise its fourth-quarter dividend to 73 cents per share.

Compiled from staff and news service reports.