Friday, November 14, 2008

Freddie Mac Asks Government for $13.8 Billion

by Calculated Risk on 11/14/2008 10:13:00 AM

From Reuters: Record loss forces Freddie Mac to tap $100 bln fund

Freddie Mac reported a $25.3 billion quarterly loss on Friday as the housing slump worsened, forcing the second-largest provider of U.S. home loan funding to draw on a $100 billion Treasury Department lifeline.

The company attributed much of the record loss to a write down of tax-related assets ...

Freddie Mac said ... [housing market] conditions worsened "dramatically" during July through September.

The companies' regulator has submitted a request for the Treasury Department to provide $13.8 billion for Freddie Mac to erase the shareholder equity deficit.
Remember Fannie and Freddie have much lower default rates than the loans packaged by Wall Street. If conditions worsened dramatically for Freddie and Fannie, imagine how bad it is for Wall Street MBS and loans held by lenders like Wachovia (Wells Fargo) and WaMu (JPMorgan Chase).