Freddie Mac avoids more government aid for now

WASHINGTON -- Freddie Mac escaped its second fiscal quarter without asking the government for any new financial aid, but said it still expects to need more federal help in the future.

The government-controlled mortgage finance company posted a quarterly loss of $374 million, or 11 cents a share, including $1.1 billion in dividends paid to the government.

The company was able to maintain a positive net worth of $8.2 billion in the quarter ended June 30. As a result, it did not need to seek funding from the Treasury Department, which has provided Freddie Mac with $51 billion since the takeover last September.

The government has pledged up to $400 billion in aid for Freddie Mac and its sibling Fannie Mae. The two companies play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.4 trillion. That's about half of all U.S home mortgages.

"While we are seeing some early signs pointing to a housing recovery — including a modest uptick in house prices in some markets — our outlook remains cautious due to rising foreclosures, growing unemployment, tight lending standards and buyers' reluctance to re-enter the market," John Koskinen, Freddie Mac's interim CEO, said in a statement.

And it's unclear how much Fannie and Freddie will repay taxpayers.

"I don't see at this point how they could pay it all back," said James Lockhart, director of the agency that regulates the two companies.