Freddie Mac Chief: Housing Market Will Get Worse in 2008

Tells investors to expect losses in fourth quarter
By Jim O'Neill,  Newser User
Posted Dec 12, 2007 11:14 AM CST
New York Attorney General Andrew Cuomo speaks to the media at his office, in New York, on Wednesday, Nov. 7, 2007. Cuomo announced that he issued subpoenas to government-sponsored lenders Fannie Mae and...   (Associated Press)
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(Newser) – Predicting even tougher times for the US housing market, Freddie Mac chief Richard Syron yesterday told investors in New York that the government-sponsored mortgage lender would report another net loss in the fourth quarter and credit losses to $12 billion on its mortgage portfolio, reports the Financial Times. Freddie Mac reported a record $2 billion loss in the third quarter.

Syron said new business has shown “terrific returns,” but warned that fourth quarter results would not be “effectively better” than last quarter. “We are not promising a silver bullet, a short-term quick fix,’’ he said. He also said default rates in Freddie Mac's mortgage portfolio could hit a record level of between 3% and 3.5%. The previous high was 2.4% in 1991.