Freddie Mac announced an enormous second quarter loss of US$821 million (A$902 million) overnight, a significant deterioration from the US$151 million (A$166 million) loss it reported in the first quarter.
Provisions for credit losses of US$2.5 billion (A$2.7 billion) were largely responsible for the government-sponsored entity’s larger than expected result.
“At a time of severe stress in the housing and credit markets, we are successfully providing critical liquidity and stability,” said chairman and executive officer Richard F. Syron, speaking about the result.
“Freddie Mac was created to ensure the continued flow of funds to America's homebuyers, and we are pleased to be fulfilling that important mission."
Freddie Mac reported a net income of US$729 million (A$801 million) for the corresponding period last year but has since been hit by surging foreclosures in the United States.
US Treasury to bail out Freddie and Fannie; 15-07-08
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