Freddie Mac Wants a Bailout of $6 Billion More

Thursday November 3rd, 2011   •   Posted by David Theroux at 10:31pm PDT   •  

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Shahien Nasiripour reports at The Financial Times in “Freddie Mac seeks further $6bn from taxpayers” that:

Freddie Mac, the US-controlled mortgage financier, has requested an additional $6bn from US taxpayers, following a $4.4bn third-quarter loss, the company�s worst three-month performance in more than a year.

The home loan group said more homeowners were falling behind on their obligations and it could not count on mortgage insurers to reimburse the company for losses. Freddie set aside $3.6bn in provisions for credit losses, its highest total since the third quarter of last year.

The additional $6bn brings its total bailout from the government to $72.2bn, of which $14.9 has been returned in the form of dividends. Fannie Mae, Freddie�s much larger rival, is due to report its earnings in the coming days.

Freddie�s deteriorating financial position underscores the poor state of the US housing market. Sales are down, delinquencies are rising and the pipeline of seized homes due to flood the market is growing ever larger. Home prices, which had begun slowly to rise in late 2009 and early 2010, are falling again, sowing anxiety among homeowners and sapping their desire to spend. . . .

Read full article here.

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November 2011