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Freddie Mac posts $5 billion loss
By Reuters
A couple listens as a representative from Freddie Mac talks to them about a loan modification for their home at the National Urban League's Economic Empowerment Tour in Dallas, Texas June 13, 2009. REUTERS/Jessica Rinaldi
NEW YORK (Reuters) - Freddie Mac <FRE.N> <FRE.P>, the second largest provider of U.S. residential mortgage funding, said on Friday it lost $5 billion in the third quarter and predicted it would require further support from the Treasury amid a "prolonged deterioration" in housing.
Increases in the value of securities it held over the quarter helped buoy its net worth, however, preventing it from need to tap government funds to stay solvent.
After a $1.3 billion dividend payment on senior preferred stock bought by the Treasury in previous quarters, Freddie Mac's loss was $6.3 billion.
Freddie Mac's loss comes amid a rise in provisions for credit losses to $7.6 billion in the quarter, up 46 percent compared with the second quarter, as delinquencies worsened on loans it guarantees.
Shares of Freddie Mac were flat at $1.23 in light after-hours trading after the results.
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