""Freddie Mac"":http://www.freddiemac.com reported Monday that it lost $4.7 billion during the second quarter.
The company had a net worth deficit of $1.7 billion as of June 30. To cover the shortfall, the GSE says its[IMAGE]
conservator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA), will submit a request to the Treasury for another $1.8 billion of taxpayer dollars. Freddie has drawn $64 billion from its line of credit with the Treasury since the government took control of the mortgage giant in September 2008.
Despite a continuous string of losses Ã¢â‚¬" this was the 11th in the last 12 quarters Ã¢â‚¬" Freddie Mac's latest earnings report actually marks an improvement. For the previous three-month period, the GSE posted a $6.7 billion loss and a $10.5 billion net worth deficit.
After paying the Treasury $1.3 billion in dividends on the stock the GSE has traded for cash allowances over the past two years, Freddie Mac said the second-quarter net loss attributable to common stockholders was $6.0 billion, or $1.85 per share.
According to ""Freddie MacÃ¢â‚¬â„¢s Q2 earnings report"":http://www.freddiemac.com/news/archives/investors/2010/2010er-2q10.html, loans the GSE holds that were originated more recently Ã¢â‚¬" in 2009 and 2010 Ã¢â‚¬" have significantly lower default rates than those made during the few years prior, at the height of the housing boom.
Freddie Mac says much of its losses in Q2 came from loans purchased or guaranteed during the 2005 to 2008 time span. The company says, though, that currently, nearly a third of its single-family portfolio is made up of newer, higher quality loans.[COLUMN_BREAK]
Charles E. Haldeman, Jr., Freddie MacÃ¢â‚¬â„¢s CEO, said, Ã¢â‚¬Å“[W]e continue to focus on the quality of the new business we are adding to our book to be responsible stewards of taxpayer funds as we support the nation's housing market.""
Freddie MacÃ¢â‚¬â„¢s single-family delinquency rate dropped to 3.96 percent during the second quarter, down from 4.13 percent at the end of March.
Ã¢â‚¬Å“The second quarter delinquency rate was positively impacted by a slowdown in new delinquencies,Ã¢â‚¬Â the GSE said in its earnings announcement, Ã¢â‚¬Å“largely due to seasonal factors, as well as a higher volume of loan modifications, mortgage loans returning to non-delinquent status, and mortgage loans completing the foreclosure process during the second quarter.Ã¢â‚¬Â
FreddieÃ¢â‚¬â„¢s total net charge-offs were $3.9 billion in the second quarter, or 0.80 percent (annualized), of the average total mortgage portfolio, compared to $2.8 billion, or 0.56 percent, in the first quarter of the year. The company says the increase was primarily driven by higher volumes of short sales, REO acquisitions, and other foreclosure alternatives.
In the second quarter of 2010, the company provided permanent foreclosure prevention solutions to 82,260 borrowers, through its own programs and the federal governmentÃ¢â‚¬â„¢s Making Home Affordable program.
In addition, 61,821 of Freddie-owned mortgages remained in trial periods under the Home Affordable Modification Program (HAMP) as of June 30, 2010. So far this year, Freddie has completed more than 22,000 short sales.
As of June 30, the GSE held 62,190 REO properties on its books, after disposing of 48,285 during the first six months of this year.
Freddie MacÃ¢â‚¬â„¢s total non-performing assets were $118.7 billion, or 5.9 percent of its total mortgage portfolio, at the end of the second quarter.
The company said, Ã¢â‚¬Å“continued weakness in the housing market and the employment market, [and] extended foreclosure timelines in many states, and challenges faced by servicers in building capacity to service high volumes of delinquent loans,Ã¢â‚¬Â has added to its non-performing numbers.