Freddie Requests $6.1B From Treasury

e Mac posted a first-quarter net loss of $9.9 billion and expects to draw $6.1 billion in funding from the Treasury Department, according to the company. Freddie Mac's request for additional Treasury funds comes on the heels of a similar [link=][u]request[/u][/link] from government-sponsored sibling Fannie Mae, which is seeking $19 billion following a first-quarter loss of $23.2 billion. Foreclosure prevention efforts helped approximately 40,000 borrowers stay in their homes or sell their properties in the first quarter, Freddie Mac says. Freddie Mac purchased or guaranteed $148 billion in mortgage loans and mortgage-related securities during the quarter, and the company's refinancing-loan purchase volume nearly quadrupled from the fourth quarter of 2008 to $95 billion. "While we expect the coming quarters to be difficult, we are seeing preliminary signs of slowing in home price declines as low mortgage rates and high affordability take hold, and conforming mortgage credit to prime borrowers continues to be widely available," says interim CEO John Koskinen. First-quarter results were driven primarily by $9.1 billion in credit-related expenses related to the continued severe economic conditions, including declines in home prices, further deterioration in labor markets, and a drop in consumer confidence to record lows. In addition, the company recorded $7.1 billion in security impairments on available-for-sale securities, primarily due to sustained deterioration in the performance of the collateral underlying the company's non-agency mortgage-related securities. These results were partially offset by net mark-to-market gains of $3.8 billion on the company's derivative portfolio, guaranteed assets and trading securities mainly due to impacts of increases in long-term interest rates and spread tightening. SOURCE: Fred


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