Freddie Seeks $31B in Aid After Posting Big Loss

By Newser Editors and Wire Services
Posted Mar 11, 2009 5:05 PM CDT
In this Sept. 25 photo, Freddie Mac Chief Executive Officer David Moffett testifies before a House panel.   (AP Photo/Kevin Wolf, File)
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(Newser) – Freddie Mac said today it will ask the government for nearly $31 billion in additional aid after posting a gargantuan loss of more than $50 billion last year as the US housing market worsened. The mortgage finance company posted a loss of $23.9 billion, or $7.37 per share, in the fourth quarter of 2008. That compares with a loss of $2.5 billion, or $3.97 a share, in the year-ago period.

The recent loss was driven by $13.2 billion in hedged trades, $7.2 billion in credit losses from the declining housing market conditions, and $7.5 billion in writedowns of the value of its mortgage-backed securities. Freddie's request for $30.8 billion in federal aid comes on top of $13.8 billion it received last year. The Treasury Department has pledged a total of $400 billion in aid for Freddie and Fannie Mae, which were seized by the government in September.