Freddie Mac, the nation’s second-largest mortgage finance giant, reported its fourth consecutive quarterly loss on Wednesday and said it would cut its dividend as it struggled through a housing crisis that had cost Wall Street tens of billions of dollars so far.
The company revealed $2.5 billion in credit losses associated with increased delinquency and foreclosure rates, and said the value of its portfolio of mortgage-backed securities had declined by $1 billion.
A billion here, a billion there..It's scary now that tax payers are behind the losses.
Freddie Mac reiterated that it would raise at least $5.5 billion from investors. The company has been under pressure from regulators and federal officials to raise additional money but as the share price has declined, the cost of raising the funds has skyrocketed.
I guess it meant "The Investor" instead of "investors".
Freddie Mac also said it would cut its quarterly dividend by 80 percent to 5 cents a share, pending board approval.
It is about time. The dividend should have been eliminated long time ago. This is a case of a bit too little too late.
Freddie Mac and Fannie Mae own or guarantee more than $5 trillion in mortgages, or nearly half of all home loans in the United States.
Remember this is the last source of mortgages in the US. And they are already over-leveraged. People looking at housing bottom are still missing the biggest issue - Mortgages. If mortgages dry up or interest rates go higher, as both will happen, it's going to be another nail in the housing markets coffin.
http://www.nytimes.com/2008/08/07/business/07freddie.html?_r=2&hp&oref=slogin&oref=slogin
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