Freddie Mac May Request Another $35 Billion

Posted by Orb Staff on January 26, 2009 No Comments
Categories : Residential Mortgage

In a filing submitted to the Securities and Exchange Commission (SEC), Freddie Mac says it anticipates a need for $30 billion to $35 billion in government aid.

The money would stem from the $100 billion Senior Preferred Stock Purchase Agreement between the government-sponsored enterprise and the U.S. Treasury. The filing notes that the actual amount of the draw may "differ materially from this estimate" as Freddie Mac performs its internal and external processes for preparing and finalizing its financial statements.

Since the government's takeover of Freddie Mac and Fannie Mae last September, the Treasury has agreed to invest up to $100 billion in each company, if needed. Following the release of Freddie Mac's third-quarter report in November, the company requested and drew $13.8 billion. The purchase agreement requires the Treasury, upon the request of the Federal Housing Finance Agency, to provide funds to Freddie Mac or Fannie Mae after any quarter in which either company reports a negative net worth.

The company's SEC filing can be viewed on the SEC's Web site, www.sec.gov.

SOURCE: Securities and Exchange Commission

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