Freddie Mac Loses $4.7B In Q2

Posted by Orb Staff on August 09, 2010 No Comments
Categories : Residential Mortgage

Freddie Mac reported a net loss of $4.7 billion for the second quarter of this year, compared to a net loss of $6.7 billion for the first quarter. As a result of the continued losses, the Federal Housing Finance Agency (FHFA) will submit a request to the Department of the Treasury for $1.8 billion to aid the ailing government-sponsored enterprise (GSE).

Freddie Mac attributed these results primarily to lower derivative losses and a lower provision for credit losses. Freddie Mac stated that its net loss in the second quarter was negatively impacted by an out-of-period accounting adjustment with the cumulative effect of $1.2 billion, net of taxes. Freddie Mac's net-worth deficit was $1.7 billion as of June 30, compared to a net-worth deficit of $10.5 billion as of March 31.

Freddie Mac also noted that its second quarter delinquency rate closed at 3.96%, down from 4.13% in the first quarter. Approximately 30% of Freddie Mac's single-family credit guarantee portfolio consisted of mortgage loans originated in 2009 and the first half of this year, which the GSE defined as a period of stronger credit quality underwriting.

‘We recognize that high unemployment and other factors still pose very real challenges for the housing market,’ says Charles E. Haldeman Jr., Freddie Mac's CEO. ‘With that in mind, we continue to focus on the quality of the new business we are adding to our book to be responsible stewards of taxpayer funds as we support the nation's housing market.’

SOURCE: Freddie Mac

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