Freddie Mac reports widening losses

Source: Exec Digital USA

Date :11/20/2007 12:19:37 PM

Freddie Mac is the latest company to report a loss, resulting from the continuing weakness of the residential mortgage and housing markets.

McLean-based Freddie reported a third-quarter net loss of $2 billion, compared to a net loss of $715 million during the same period last year.

That equated to a loss of 3.29 dollars per share for the quarter ended September compared with 1.17 dollars previously.

The shareholder-owned firm - created by Congress - also reported a decrease in the fair value of net assets of approximately $8.1 billion for the third quarter of 2007, compared to an increase of about $300 million for the same period in 2006.

Improving performance

Freddie Mac said it was considering cutting its fourth quarter dividend payout to shareholders by 50 percent in a bid to bolster its finances. It said it was consulting Goldman Sachs and Lehman Brothers in a bid to improve its financial performance.

Total credit losses were $126 million for the quarter and $263 million for the nine months until the end of September.

Chief Executive Richard Syron said that credit losses are expected through until at least the end of next year."It is likely that the fourth quarter will prove difficult as well," he said.

November 20, 2007