Rising delinquencies and a still-skidding home market combined to make Freddie Mac’s second quarter losses three times worse than analysts predicted, reports Bloomberg. The government-backed mortgage enterprise lost $821 million, or $1.63, in the quarter, prompting it to also announce a third quarter slash in dividends from 25 cents to 5 cents a share.
Freddie, which owns $2.2 trillion in mortgages, said credit-related expenses doubled from the first quarter to $2.8 billion. It also wrote down $1 billion in risky mortgages. Concerns that Freddie’s capital reserves are insufficient to ride out the housing slump have driven its share price down 76% this year despite a US-backed rescue package and pledge of support.