Freddie Mac, the second-largest US mortgage lender, lost $2.02 billion this quarter, its worst quarter ever, the company said this morning. With core capital almost below its regulatory minimum, the company is looking for fast cash, hiring Goldman Sachs and Lehman Brothers to help bail it out, and “seriously considering” slashing its dividend by 50%. Shares fell 7% in pre-market trading.
Freddie Mac’s capital minimum is more stringent than most; regulators upped it 30% after Mac reported big accounting mistakes in 2003, understating results by $5 billion. This quarter, losses amounted to $3.29 a share, vastly eclipsing the $0.22 loss analysts predicted. Fellow lender Fannie Mae meanwhile reported a $1.39 billion loss. Together, Mae and Mac own or guarantee 40% of US mortgages.