Freddie Mac Posts $5 billion Loss

An ETrade story posted on Yahoo Finance November 6 reports that Freddie Mac, recipient of tens of billions of dollars in taxpayer bailout money, posted a $5 billion loss in the third quarter. The story says Freddie Mac expects to need more government bailout money to keep afloat.

ETrade says, "The home funding company's loss comes amid a rise in provisions for credit losses to $7.6 billion in the quarter, up 46 percent compared with the previous quarter, as delinquencies worsened on loans it guarantees. Provisions will remain high this quarter, it added. 'I would say we are just beginning to see the impact of the chargeoffs on their guarantee book,' said Janaki Rao, vice president of mortgage research at Morgan Stanley in New York. Its larger rival Fannie Mae (NYSE:FNM - News; NYSE:FNM - News) on Thursday said it would need $15 billion from the U.S. Treasury after a whopping $18.9 billion third-quarter loss."

Am I the only one who feels like I'm not getting a good return on my investment as a taxpayer? We've already given Freddie Mac more than $50 billion, and Fannie Mae is getting close to $60 billion.

The story continues, "The losses have presented a dilemma to Congress as it wants to protect taxpayers' money but is also counting on the companies to undertake foreclosure prevention efforts which are significantly adding to expenses. In order to ease the terms of loans under the Obama administration's Making Home Affordable refinancing program, the companies must buy the mortgages out of securities, and write down their value. Seeking alternatives to foreclosures also means bad loans sit on their books longer."

http://finance.yahoo.com/news/Freddie-Mac-posts-5-billion-rb-3083454207.html?x=0&.v=3