November 3, 2010

Freddie Mac Loses $4.1 billion in Q3

With no housing recovery in sight, Freddie taps Treasury for $100 million

Freddie Mac on Wednesday reported a net loss of $4.1 billion, or $1.25 per diluted common share, for the third quarter of 2010, compared with a loss of $6 billion, or $1.85 per diluted common share, for the second quarter of 2010.

The Federal Housing Finance Agency, Freddie Mac’s conservator, said it will ask Treasury for a draw of $100 million under the Senior Preferred Stock Purchase Agreement.

The company, which trades as a penny stock on the over-the-counter market as FMCC since the company was delisted from the NYSE in July, said the loss resulted from several factors, including a dividend payment of $1.6 billion to Treasury, which exceeded total comprehensive income of $1.4 billion.

The company reported total comprehensive income of $1.4 billion for the quarter ended Sept. 30, compared to a total comprehensive loss of $0.4 billion for the quarter ended June 30. Total comprehensive income for the third quarter includes the net loss of $2.5 billion for the quarter, which was more than offset by a $3.9 billion improvement in AOCI, primarily driven by increased fair values of the company's AFS securities as interest rates continued to decline.

The company had a net worth deficit of $58 million at Sept. 30, 2010, compared to a net worth deficit of $1.7 billion at June 30, 2010.

"As we near the end of 2010, the housing market remains fragile, and has recently come under renewed pressure from slowing economic growth, weaker employment and foreclosure uncertainties," Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr, said is a statement. "We believe that it will be a considerable time until the housing market has a sustained recovery."

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