Freddie Mac announced on Friday January 23, 2009 that it would need an additional $30-35 billion in government aid to address losses on loans it has backed during the national financial crisis. This amount is in addition to the $13.8 billion the company has received after being taken over by the government in 2008.
Freddie Mac said that its government regulator, the Federal Housing Agency, will make the request for aid to the Treasury Department. The company posted a loss of $25.3 billion in the third quarter, and the new request is expected to reflect losses the company incurred in the fourth quarter.
In the coming week, the Federal Housing Finance Agency will also set new rules regarding Freddie Mac’s portfolios, as well as those of its sister company, Fannie Mae.
The two companies provide the largest sources of funding in the nation’s housing market, buying mortgages from lenders and either keeping them or bundling them into securities.
Source: Associated Press, CNNMoney