Freddie Mac asks for $30.8 billion more in aid after latest loss
The mortgage finance company today reported a net loss of $23.9 billion, or $7.37 a share, for the quarter ended December 31, 2008. That compares with a net loss of $25.3 billion, or $19.44 per share, for the quarter ended September 30, 2008. Freddie lost a whopping $50.1 billion last year.
"Freddie Mac is working hard to serve our expanded mission in this historic crisis, by doing all we can to help stabilize the financial markets and hasten the recovery in housing," said David Moffett, who is departing as Freddie Mac's CEO after six months on the job to return to the private sector. "We absorbed heavy financial losses last year, driven primarily by mark-to-market items and credit-related expenses. But we also provided vital liquidity to the strapped housing market – injecting more than $460 billion in mortgage funding in 2008."
Freddie Mac also named John A. Koskinen as the company's interim chief executive officer and Robert R. Glauber as its interim non-executive chairman. Both appointments will be effective Moffett's departure. He had pledged to quit as a member of the board no later than March 13.
The company and its larger corporate sibling Fannie Mae (FNM) were taken over by the federal government in September following a decline in the value of their holdings and given $200 billion in funding. Both Freddie Mac and Fannie Mae will play key roles in President Obama's plans to address the worsening foreclosure crisis.
Under Obama's plan, as many as five million homeowners who are still making payments on their loans but who cannot qualify for conventional refinancing because their home values have dropped could refinance through Freddie and Fannie. The company will contribute $25 billion to the plan.