Wednesday, November 3, 2010
Freddie Mac Reports $2.5 Billion Loss, Warns of Weak Housing Market
Freddie Mac reported a narrower $2.5 billion third-quarter loss, the smallest shortfall in more than a year amid signs that mortgage delinquencies are slowing. But the company warned that delays in the foreclosure process could raise costs "significantly" and that losses also could rise amid a faltering housing recovery.
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The third-quarter loss compared with a year-earlier net loss of $5.4 billion. While gains in the value of certain securities and derivatives left Freddie with a small cash surplus at the end of the quarter, it was forced to ask the Treasury for $100 million, in part to cover the cost of $1.6 billion in interest payments made to the government.
ReplyDeleteI think this is a good sign. It is my opinion that steady (less negative growth) will occur before we see any gains from the housing market.
Charles E. Haldeman Jr., Freddie's chief executive, in a statement: "We believe that it will be a considerable time until the housing market has a sustained recovery."
I agree with this.