Freddie Mac reports $14 billion loss in 2010

Those losses left Freddie with a net worth deficit of $401 million at the end of 2010. The Federal Housing Finance Agency, which oversees and runs Freddie and co-GSE Fannie Mae since the two come under federal conservatorship, will deal with that deficit by tapping the Treasury Department for $500 million.

However, that money will come out of the $1.6 billion dividend Freddie paid to the government in the fourth quarter. At the end of 2010, the government’s net investment in Freddie totaled $53.7 billion.

Freddie officials struck a generally optimistic tone about the GSE’s financial situation, but noted that tough times remain ahead for the housing market.

“Last year, we not only added strength and stability to the housing market but we also strengthened Freddie Mac itself,” said Charles E. Haldeman, Jr., Freddie’s chief executive officer. “We expect national home prices to decline this year as housing will continue to take some time to recover. Freddie Mac will be there every step of the way.”

Freddie’s financials will not win any favor on Capitol Hill, as House Republicans have announced that getting the GSEs free of taxpayer backing will be a top priority in the new Congress.

Similarly, the Obama administration has announced that under its plan for the nation’s housing finance system, Fannie and Freddie would ultimately be wound down, with much of the support for the housing market moving into the private sector.

This post updated at 5:12 pm.