Freddie posts wider 3Q loss, expects to draw $6B from Treasury
Freddie Mac reported a deeper third-quarter loss of $4.4 billion on Thursday, prompting the government-sponsored enterprise to announce another $6 billion draw on Treasury funds. The loss reported by the GSE is two times wider than the $2.1 billion loss reported during the same period of 2010 and is attributed to derivative losses, provisions for credit losses and lower net interest income. In addition, Freddie recorded a $1.6 billion quarterly dividend payment to the Treasury, leading to a deeper deficit. Overall, Freddie said it has a net worth deficit of $6 billion, which will force its conservator, the Federal Housing Finance Agency, to request another $6 billion from the Treasury. The GSE noted that its single-family delinquent rate hit 3.51% in the end of September, which is mostly unchanged from June and below industry benchmarks. Freddie's involvement in the multifamily segment continues with the GSE providing liquidity for the multifamily rental market during the quarter. In the first nine months of the year, Freddie helped finance 200,000 apartment units. Still, Freddie noted that its single-family credit guarantee portfolio continues to face credit losses due to the weak economy and anemic housing market. The company on an aggregate basis has recorded a credit loss provision of $70.5 billion since the beginning of 2008. Write to Kerri Panchuk.