Freddie Mac requests additional $1.8 billion in aid from federal government

Government-controlled mortgage giant Freddie Mac is requesting $1.8
billion more in federal help after a larger second-quarter loss. 

Freddie
Mac lost $6 billion, or $1.85 per share, from April through June, the
firm announced Monday. Those losses include $1.3 billion the company is
required to pay the Treasury Department, representing a 10 percent
annual dividend. 

“We recognize that high unemployment and other
factors still pose very real challenges for the housing market,” Freddie
chief executive Charles Haldeman said in a statement. “With that in
mind, we continue to focus on the quality of the new business we are
adding to our book to be responsible stewards of taxpayer funds.”

During
the same period last year, the company lost $840 million. 

On
Thursday, Fannie Mae asked for an additional $1.5 billion after posting a
$3.13 billion loss, although its losses shrank dramatically in the
second quarter, down from $11.5 billion in the first quarter.

Both companies, which own about half of the nation’s mortgages, about 31 million, valued at more than $5 trillion, were rescued by the government from the edge of collapse almost two years ago. They’ve needed more than $149 billion to stay in business, including $63.1 billion used by Freddie Mac and $86.1 billion for Fannie Mae, including the second-quarter request. 

Fannie and Freddie faced political pressure and got an added push from Wall Street during the housing boom to expand homeownership to back riskier loans. Both companies have blamed their losses on bad loans they backed between 2005 and 2008. 

Looking down the road, Treasury Secretary Timothy Geithner, along with lawmakers, have said they intend to overhaul the two companies and could consider a replacement for the two mortgage giants but have yet to offer a plan. 

Geithner will hold a public conference Aug. 17 to discuss the nation’s mortgage finance system.