McLEAN, Va. – Freddie Mac is asking the government for $30.8 billion in aid after posting a massive loss of more than $50 billion last year as the housing market worsened.
The secondary mortgage market giant posted a loss of $23.9 billion yesterday for its fourth quarter of 2008. That compares with a loss of $2.5 billion for the same period last year.
The latest red ink was driven by a $13.2 billion loss on hedged trades, $7.2 billion in credit losses due to declining housing market conditions and $7.5 billion in writedowns of the value of its mortgage-backed securities.
The request for federal aid comes on top of $13.8 billion the company received last year.
Freddie’s announcement came two weeks after Fannie Mae announced losses of $25.2 billion for its fourth quarter, and $58.7 billion for the year, triggering requests for tens of billions of additional government aid.
Separately, Freddie announced yesterday that John Koskinen, a long-time politico who has been serving as the company’s non-executive chairman since September, will become chief executive officer upon Friday’s resignation of David Moffett. Moffett stepped down after less than six months on the job as the company continues to hemorrhage from mortgage losses and plans to ask the government for up to $35 billion in additional aid.
Koskinen has served as deputy mayor and city administrator for Washington, D.C., deputy White House budget director and as president of the United States Soccer Foundation. Prior to his government service, Koskinen worked as a senior executive of The Palmieri Company and participated in the restructuring of a range of large, troubled enterprises including the Penn Central, the Teamsters Pension Fund, Levitt and Sons, Inc. and Mutual Benefit.
