Freddie Mac records $5 billion loss

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Freddie Mac records $5 billion loss

Sat, 07 Nov 2009 09:40:27 GMT

http://www.presstv.com/detail.aspx?i...tionid=3510213

US mortgage giant Freddie Mac says its third-quarter loss has stood at $5 billion due to a prolonged deterioration in the housing market.

Freddie Mac, the second largest provider of US residential mortgage funding, says it posted a net loss of $5 billion and paid a dividend of $1.3 billion to the US Treasury in the quarter.

The firm had recorded $63.6 billion in net losses over the seven quarters ending in March amid a three-year housing plunge.

The lender has also received $50.7 billion in government capital since November 2008.

The company said that there have been 'some positive housing market developments' and it may need additional aid from the US Treasury in the coming months.

"Factors like high unemployment, excess inventory and rising foreclosures will continue to impede a full recovery for some time and put further downward pressure on house prices," said Freddie Mac Chief Executive Officer Charles Haldeman.

"We expect to request additional funds from the Treasury as this prolonged deterioration of market conditions continues to negatively impact our financial results."

Earlier this week, Fannie Mae, which reported a net loss of almost $19 billion in the third quarter, said it needed an additional $15 billion dollars in taxpayer funds.

Fannie and Freddie have already received hundreds of billions of dollars as part of a government takeover.

The bailouts are aimed at avoiding a collapse of the two lending giants in the wake of the subprime mortgage crisis.