Freddie Posts $25B Loss, Taps Treasury Funds

Posted by Orb Staff on November 14, 2008 No Comments
Categories : Residential Mortgage

Freddie Mac has reported a net loss of $25.3 billion, or $19.44 per diluted common share, for the quarter ended Sept. 30.

As a result of the loss, pursuant to the company's agreement with the U.S. Department of the Treasury, the director of the Federal Housing Finance Agency has submitted a request to the Treasury in the amount of $13.8 billion.

Freddie Mac says that third-quarter results were driven primarily by a non-cash charge of $14.3 billion related to the establishment of a partial valuation allowance against the company's deferred tax assets; $9.1 billion in security impairments on available-for-sale securities; and $6.0 billion in credit-related expenses arising from the dramatic deterioration in market conditions during the third quarter, including declining home prices, increasing unemployment, a significant decline in consumer spending and a considerable tightening of both consumer and business credit.

The company expects to receive its funds from the Treasury by Nov. 29.

Source: Freddie Mac

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