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Freddie Mac's 3rd Quarter Report--Delinquency Rate Decline, First Decline in Over Three Years

Freddie Mac CEO Ed Haldeman said it "will be a considerable time" before the housing market fully recovers.
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On Nov. 3, 2010 Freddie Mac reported a $4.1 billion third-quarter loss. This is Freddie’s fifth straight quarterly loss.The loss would have “only” been $2.5 billion, except Freddie had to ante up a $1.6 billion dividend payout to the U.S. Treasury. Freddie’s net income for the quarter was $1.4 billion. Freddie Mac is a Virginia-based government-sponsored enterprise (GSE) chartered by Congress to stabilize the nation’s residential mortgage markets. The U.S. Treasury has an 80 percent stake in Freddie. Freddie buys mortgages from their approved lenders, which then enables those lenders to make more mortgage loans to other borrowers.

With the latest loss, Freddie is requesting a modest $100 million in government aid, compared to the $1.8 billion it asked for after the second quarter. Freddie has received $63 billion from the Treasury since September 2008, when it was seized by regulators along with Washington-based Fannie Mae. The two GSEs have received more than $148 billion in aid and returned $14.6 billion in dividends.

Any good news here? Freddie reported the lowest credit losses in more than two years and rates of seriously delinquent mortgages declined across its entire portfolio, most sharply in subprime loans. Its overall delinquency rate stood at 3.96% at Sept. 30, the first decline in over three years.

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December 14, 2019, 8:00 am PDT

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