Freddie Mac Expects Huge HurricaneLosses
McLEAN, Va. - (10/06/05) -- Secondary housing market giantFreddie Mac, which is holding billions of dollars in mortgages inLouisiana, Mississippi and Alabama, said Wednesday it expects toreport third-quarter losses of between $150 million and $300million as a result of hurricanes Katrina and Rita. That includesboth mortgages it is holding in the flood-ravaged communities, aswell as guarantees on billions of dollars of mortgage-backedsecurities, a Freddie spokesman told The Credit Union Journal. Thespokesman said less than 1% of the company's $1.6 trillion inmortgages and mortgage securities were affected by the two storms.Some observers believe that means Freddie is holding as much as $15billion in paper backed by mortgages in the storm-affected areas.Freddie Mac and Fannie Mae are believed to be the two largestholders of mortgage paper affected by the two storms. Fannie Maehas yet to estimate its losses from the hurricanes.