Freddie Mac came out this morning with a net $2billion of losses. The latest quarter losses included $2.7 billion in Mark-to-Market and $1.2 billion in credit-loss provisions.
It may cut it's dividend in half and needs capital right away to keep it's core capital above required minimum of 30%.
So Ben B. and Mr. Schumer wanted these folks to give out $1 million loans. I love how every politician likes to waste our tax payer dollar to help themselves.
Why does Mr. Schumer want to enable the GSE's with a higher limit? Think this is about helping homeowners? People who need help are the sub prime borrowers, not the rich. By giving out $1m loans, you are only helping the rich. But this is really to bail out the financial institutions behind this mess. Look at his campaign contributions and you will see why. In 2008, biggest contributions to his campaign were made by Finance/Insurance/Real-Estate. They contributed 42 percent of his campaings money or $ $6,040,453 (42%). For details, goto http://www.opencongress.org/people/show/300087_charles_schumer
The mortgage financier said its estimated regulatory core capital is almost below the regulatory minimum of 30%. In order to keep it from falling below that, it has engaged Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. to help consider "very near-term capital raising alternatives."
Freddie Mac is also "seriously considering" reducing its fourth-quarter dividend by 50%. If those measures are not sufficient, then the company "may consider additional measures in the future such as limiting growth or reducing the size" its retained portfolio.
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