New York Times (02/29/08) P. C5
Freddie Mac on Feb. 28 reported that it lost a record $2.5 billion in the fourth quarter. The loss of $3.97 per share was far more than the loss of $2.48 a share anticipated by Wall Street analysts. The mortgage-finance giant cited higher defaults on mortgages that it guarantees as a factor and added that it expects to lose billions of dollars more as the downturn in the housing market continues and more borrowers fail to keep up with their payments. Earlier in the week, the Office of Federal Housing Enterprise Oversight said it would lift restrictions on the portfolios of Freddie Mac and Fannie Mae, but the companies have been more focused on writing down the values of mortgage securities and increasing reserves of late. Regulators believe Freddie Mac and Fannie Mae could use their capital to give the housing market a boost by financing mortgages.
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