Freddie Mac Pares Down Losses in Fourth Quarter
Although Freddie Mac's losses are significant, its performance did represent some progress. Freddie Mac was able to make a $1.3 billion dividend payment to the Treasury Department, which has a nearly 80% stake in the financial institution. For the year, Freddie Mac said it cut it losses by more than half compared to 2008. After making total dividend payments of $4.1 billion on its senior preferred stock to Treasury, Freddie Mac reported a net loss of $25.7 billion for 2009, compared to a net loss of $50.8 billion for 2008.
The mortgage giant has borrowed $51 billion in taxpayer money from Treasury since it and its sister corporation, Fannie Mae, were taken into conservatorship in 2008. It has a commitment from Treasury for an additional $200 billion in aid if needed. Together with Fannie Mae, the two companies guarantee about $5.5 trillion in loans – almost half of all mortgages in the U.S.
In a statement, Freddie Mac CEO Charles Haldeman was upbeat, suggesting that low mortgage rates, affordable pricing and the homebuyer tax credit could help to stabilize the economy and improve the company's prospects, but he noted, "The housing recovery remains fragile with significant downside risk posed by high unemployment and a potential large wave of foreclosures."