Freddie seeks $1.8bn from US Treasury

Financial Times

Freddie Mac, the second largest US mortgage finance company, said on Monday that it would need an additional $1.8bn from the US Treasury Department, as souring home loans continue to saddle it with losses.

The company said it lost $6bn, or $1.85 a share, in the second quarter. That marked a sharp increase from the same period a year ago, when it lost $840m, but was improved from the first three months of the year.

Charles Hadelman, Freddie chief executive said, that the company “continues to support the still-fragile housing market by providing America’s families with access to affordable home financing and foreclosure alternatives” but that the market still faces real challenges.

As it requested further aid, Freddie also paid a $1.3bn dividend to Treasury. Freddie and its larger rival Fannie Mae have received about $150bn in assistance since the government’s 2008 bail-out of the companies.

In June, Freddie and Fannie were ordered to be delisted from the New York Stock Exchange for failing to meet minimum price guidelines. Republicans have been pushing for the government-sponsored entities to be broken up and privatised, but the Obama administration is not planning to address reforming the troubled companies until next year.

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