Hot on Facebook

Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Freddie Mac Reports Record $2.45B Loss

Rising defaults break mark mortgage investor set ... last quarter

By Kevin Spak, Newser Staff

Posted Feb 28, 2008 10:27 AM CST

(Newser) – Freddie Mac, the nation’s second-largest mortgage finance company, lost $2.45 billion in 2007's fourth quarter, topping the record $2.02 billion it lost the previous quarter, Bloomberg reports. Freddie’s CEO predicted still-greater losses ahead as loan defaults take their toll, but said the company had raised enough money to weather the storm—unless things get drastically worse.

The loss of $3.97 per share was worse than expected, with analysts having forecast a $2.34 per-share drop, the Wall Street Journal reports. Freddie Mac and fellow government-backed financier Fannie Mae together account for 45% of the home loan market. Fannie yesterday reported $3.56 billion in losses. It’s “discouraging,” said one trader. “Right now, I see no relief” for housing.

Richard Syron, chairman and CEO of Freddie Mac, talks about the sub-prime lending crisis and its effect on the housing market in Boston in this April 27, 2007 file photo. (AP Photo/Stephan Savoia, file) (Associated Press)

Richard Syron, chairman and CEO of Freddie Mac, answers a reporter's question in Boston in this April 27, 2007 file photo. The mortage-investment company took a $2.45 billion loss in the fourth quarter... (Associated Press)

A house is for sale Friday, June 1, 2007 in Oldwick, N.J. (AP Photo/Mark Lennihan) (Associated Press)

An auction sign rests in front of this foreclosed home in Shaker Heights, Ohio in this Tuesday, Oct. 30, 2007 file photo. (AP Photo/Tony Dejak, File) (Associated Press)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Big Fannie Mae Losses Prompt Fears of Failure

Crash would be big blow to US economy, housing market

(NEWSER) - Fannie Mae lost a worse-than-expected $2.2 billion this quarter, forcing it to cut its dividend and seek $6 billion in capital. The news is especially troubling as Fannie and Freddie Mac, the companies Washington relies on to keep the housing market functioning, are under unprecedented pressure, the New York Times reports. Many are now worried that one or both of them, after stepping in to rescue a torrent of troubled mortgages, may soon need bailouts themselves. More»

Fannie Mae Loses Billions in Q4

Government-backed lender off $3.56B, but feds lifts restraints on portfolio

(NEWSER) - Fannie Mae reported huge fourth-quarter losses today, painting an ugly picture both of the economy and the mortgage giant's own future. The company lost $3.56 billion—triple what analysts expected, Bloomberg reports. Derivatives were the big culprit, accounting for $3.33 billion in losses, but the company also reported spikes in late payments and delinquencies. More»

Fannie, Freddie to Offer Mass Loan Modifications

Housing giants aim to reduce foreclosures

(NEWSER) - Fannie Mae and Freddie Mac will roll out a plan today to modify hundreds of thousands of loans in an effort to prevent foreclosures, the Wall Street Journal reports. The mortgage giants, under federal conservatorship, aim to reduce mortgage payments to no more than 38% of household income. Private banks will be encouraged by the Treasury to perform similar surgeries. More»

Fannie-Freddie Merger: The Math Adds Up

As both companies plummet, combining them might make sense

(NEWSER) - With Fannie Mae and Freddie Mac struggling to stay afloat, arguments for a merger are gathering steam. “Sometimes size can be a strength,” writes Andrew Ross Sorkin in the New York Times. The companies spent $1.825 billion in total overhead in the first half of 2008 doing exactly the same thing; a merged entity could save some $1.2 billion a year. More»

Fannie Mae Won't Lend to Deadbeat Homeowners

'Strategic defaulters' won't be eligible for 7 years

(NEWSER) - Fannie Mae has decided to deny homeowners who intentionally default on their mortgages any new loans for seven years, the company announced yesterday. About 12% of foreclosures are the result of people who could pay their mortgages choosing not to and walking away, generally because their home is now worth less than they owe, and that’s “bad for borrowers and bad for communities,” a Fannie vice president said yesterday. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Freddie Mac Reports Record $2.45B Loss

Rising defaults break mark mortgage investor set ... last quarter

OTHER STORIES ON OUR RADAR

earnings reports • mortgage • Freddie Mac • Fannie Mae • mortgage brokers • subprime crisis • mortgage defaults • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Big Fannie Mae Losses Prompt Fears of Failure

Crash would be big blow to US economy, housing market

Fannie Mae Loses Billions in Q4

Government-backed lender off $3.56B, but feds lifts restraints on portfolio

Fannie, Freddie to Offer Mass Loan Modifications

Housing giants aim to reduce foreclosures

Fannie-Freddie Merger: The Math Adds Up

As both companies plummet, combining them might make sense

Fannie Mae Won't Lend to Deadbeat Homeowners

'Strategic defaulters' won't be eligible for 7 years

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

Freddie Mac Reports Record $2.45B Loss

Rising defaults break mark mortgage investor set ... last quarter

Bookmark & Share

OTHER STORIES ON OUR RADAR

earnings reports • mortgage • Freddie Mac • Fannie Mae • mortgage brokers • subprime crisis • mortgage defaults • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Big Fannie Mae Losses Prompt Fears of Failure

Crash would be big blow to US economy, housing market

Fannie Mae Loses Billions in Q4

Government-backed lender off $3.56B, but feds lifts restraints on portfolio

Fannie, Freddie to Offer Mass Loan Modifications

Housing giants aim to reduce foreclosures

Fannie-Freddie Merger: The Math Adds Up

As both companies plummet, combining them might make sense

Fannie Mae Won't Lend to Deadbeat Homeowners

'Strategic defaulters' won't be eligible for 7 years

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?