Freddie Mac seeks $1.5 billion from taxpayers
(Reuters) – Mortgage finance giant Freddie Mac FMCC.OB said on Monday it would need to ask for an additional $1.5 billion from taxpayers due to losses stemming from weak housing markets.
The company reported a comprehensive loss in the second quarter of $1.1 billion. Despite income of $1 billion, the company registered a net worth deficit of $1.5 billion.
That is in part because it was required to pay dividends worth $1.6 billion to the Treasury. As a result, the cost to taxpayers of its rescue declined by $100 million this quarter.
Freddie Mac has drawn $65.2 billion from the government since it was taken over at the height of the financial crisis in September of 2008.
Because of dividend payments, the net cost of Freddie Mac’s rescue peaked at $56.2 billion in the second quarter of last year. In the most recent quarter, the cost eased to $52 billion.
Freddie Mac said it expects home prices to decline in the near term, and that it expects its credit losses to remain elevated in the second half of the year.