Freddie Requests $100M Draw After Third-Quarter Loss

Posted by Orb Staff on November 04, 2010 No Comments
Categories : Mortgage Servicing

7066_cash_-_us_flag Freddie Requests $100M Draw After Third-Quarter Loss After making a dividend payment of $1.6 billion to the U.S. Treasury Department, Freddie Mac reported a net loss of $4.1 billion for the third quarter. The company's regulator, the Federal Housing Finance Agency, will, in turn, request a $100 million draw from the Treasury – a drop from the $1.8 billion requested after the second quarter.

Freddie Mac has provided financing for 1.2 million borrowers this year, says CEO Charles E. Haldeman, adding that recent-vintage loans are performing well.

‘The actions we have taken together with our mortgage lenders to continue to build a strong foundation of responsible lending practices are working – the 2009 and 2010 books of business are the strongest since 2003 as measured by [loan-to-value ratios] and FICO scores,’ he says.

Freddie Mac loan workouts – which include modifications, repayment and forbearance plans, and home forfeiture foreclosure alternatives – dropped by more than 16,000 last quarter, with modifications falling by about 11,000. The company noted that nearly half of Freddie Mac borrowers who have entered a Home Affordable Modification Program trial have dropped out.

Additionally, more than 40% of loan modifications completed in the second quarter of 2009 redefaulted in the following 12 months. However, more recent modifications appear to be performing better, Freddie Mac data show. Of the loans modified in the second quarter of 2009, 73% were performing at the three-month mark. By comparison, 94% of the modifications executed in the second quarter of this year were current and performing after three months.

In total, the single-family delinquency rate dropped from 3.96% at the end of June to 3.8% at the end of September.

SOURCE: Freddie Mac

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