Freddie Mac sees $4.4bn loss

 
City A.M. Reporter
MORTGAGE giant Freddie Mac said yesterday it will seek an extra $6bn (£3.7bn) from US taxpayers following its worst quarterly loss this year.

The US government-owned company reported a comprehensive loss in the third quarter of $4.4bn, it said in a filing with the US Securities and Exchange Commission. That compared with a $2.5bn loss for the same three-month period last year.

Despite income of $4.6bn, the company registered a net worth deficit of $6bn, which was partly attributed to a $1.6bn quarterly dividend payment to the US Treasury.

“The weak labour market and fragile economy continue to weigh heavily on the single-family market, causing many potential buyers to sit on the sidelines or opt to rent despite high affordability and record low mortgage rates,” chief executive Charles E Haldeman said in a statement.

Freddie Mac has now drawn $72.2bn from the US government since it was taken over at the height of the financial crisis in September 2008. The government seized both Freddie Mac and larger rival company Fannie Mae as mortgage losses at the two firms piled up and threatened them with insolvency.

Freddie Mac has now returned $14.9bn of the money it has drawn from Treasury in the form of dividend payments.

“Looking ahead, we expect the tepid recovery to continue to put downward pressure on house prices into early next year,” Haldeman said.