Freddie Mac Posts $4.1 Billion Loss, Requests More U.S. Aid

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Freddie MacMortgage giant Freddie Mac posted a net loss of $4.1 billion for the third quarter, compared with a loss of $6 billion a year earlier.

The company paid a $1.6 billion dividend to the Treasury, which rescued the ailing company two years ago. Freddie Mac also set aside $3.7 billion to cover credit losses and posted derivative losses of $1.1 billion, the company said in a statement.

Freddie Mac will request a further $100 million from the Treasury.

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Even in its current financial distress, Freddie Mac has purchased or guaranteed one in four U.S. mortgages originated this year.

"We have helped to keep the housing finance and broader capital markets functioning smoothly," CEO Charles E. Haldeman, Jr. said.

Net interest income was $4.3 billion, compared with $4.1 billion a year earlier. Credit losses declined to $3.7 billion from $5 billion in the third quarter of 2009.

Haldeman made a gloomy forecast for the U.S. housing market, which has suffered from weak demand for mortgages and a surge in foreclosures.

"As we near the end of 2010, the housing market remains fragile, and has recently come under renewed pressure from slowing economic growth, weaker employment and foreclosure uncertainties," Haldeman said. "We believe that it will be a considerable time until the housing market has a sustained recovery."
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