Freddie Mac receives additional $6.1 billion from government
By: STEPHEN BERNARD
Associated Press
July 1, 2009
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| In this July 13, 2008 file photo, the Freddie Mac's corporate offices are seen in McLean, Va. David Kellermann, the acting chief financial officer of mortgage giant Freddie Mac, was found dead at his home Wednesday morning in what police said was an apparent suicide. (AP) |
NEW YORK — Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted Wednesday.
The Federal Housing Finance Agency, which has been operating Freddie Mac since last fall, requested the funds for Freddie Mac after the mortgage firm's liabilities exceeded its assets by more than $6 billion, according to the filing with the Securities and Exchange Commission.
After drawing the funds, Freddie Mac has now received $51.7 billion from the Treasury Department and still has access to an additional $149.3 billion to help it finance operations.
In early May, Freddie Mac said it would seek the additional funds to help offset its worsening books as it continues to hemorrhage cash amid the ongoing housing market downturn. It was the third time since Freddie Mac was taken over in September that it has requested funds.
The McLean, Va.-based company posted a loss of $9.9 billion, or $3.14 per share, for the quarter ending March 31. The results were driven by $8.8 billion in credit losses due to soaring delinquency rates and falling home prices, and $7.1 billion in write-downs of the value of its mortgage-backed securities.
Freddie Mac has been among the hardest hit financial firms, along with fellow mortgage guarantor Fannie Mae, amid the housing slump, credit crisis and ongoing recession. Mounting losses led to government takeovers amid concern the collapse of the mortgage companies would throw the housing market into further chaos.
Washington-based Fannie Mae and Freddie Mac play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, the companies own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all U.S home mortgages.
