Government-Backed Freddie Mac Lost Nearly $26 Billion Last Year

By Matt Loffman

Feb 24, 2010 2:06pm

ABC News’ Matthew Jaffe reports: Government-backed mortgage giant Freddie Mac today reported a loss of $7.8 billion for the final three months of last year, with a total loss of $25.7 billion for the year overall. Despite the losses, Freddie Mac CEO Charles Haldeman Jr. emphasized that the mortgage lender provided a big boost to homeowners, purchasing one out of four home loans originated last year, helping 1.8 million borrowers lower than mortgage payments, and enabling over 250,000 families to avoid foreclosure. “In a trying and turbulent year, Freddie Mac played a critical role in supporting the nation’s housing recovery,” Haldeman said in a statement. “We start 2010 with some early signs of stabilization in the housing market, with house prices and home sales likely nearing the bottom sometime in 2010. We expect the low mortgage rates, relatively high affordability, and the homebuyer tax credit will help continue to fuel the recovery.” However, Haldeman warned that more tough times could lie ahead for the lender, with four percent of borrowers at least three months behind on payments. “The housing recovery remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures,” he said. “That’s why our commitment to help struggling homeowners is steadfast.” Just before Christmas last year, the Treasury Department essentially agreed to provide a blank check to Freddie Mac and fellow government-backed lender Fannie Mae, removing the cap for federal support. Treasury has provided Freddie Mac with about $51 billion thus far. “All of a sudden we have unlimited taxpayer exposure to the bailout of Fannie and Freddie,” Rep. Jeb Hensarling, R-TX, said to Treasury Secretary Tim Geithner at a House Budget Committee hearing Wednesday. “A bailout nation where the big get bigger, the small get smaller, and the taxpayers get poorer.” -Matthew Jaffe

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