McLEAN, Va. – Freddie Mac yesterday announced its losses for the fourth quarter rose to $2.5 billion, from $1.2 billion in the third quarter, as the mortgage crisis continued to take hold of one of the biggest players in the market.
As a result, the secondary mortgage market giant reported a loss of $3.1 billion, or $5.37 a share, for the full year.
The report of red ink for Freddie came a day after its secondary market sister, Fannie Mae, reported a $3.6 billion fourth quarter loss and a $2.1 billion loss for the full year.
As was the case with Fannie Mae, Freddie Mac said fourth quarter losses mostly were driven by losses on its interest-rate hedges, including a $2.3 billion loss on the value of its financial derivatives due to the decline in long-term interest rates. Freddie also reported an $800 million fourth quarter loss on the value of its credit guarantees.
