Freddie Mac Reports $2 Billion Third Quarter Loss

McLEAN, Va. – In another sign of the growing mortgage crisis, secondary mortgage market giant Freddie Mac reported yesterday that it has written down the value of its mortgage portfolio by a whopping $8.1 billion and took a $2 billion loss for the third quarter.
 
The third quarter loss is almost triple the $715 million loss for the same quarter last year.
 
Third quarter results include an additional $1.2 billion provision for credit losses, due to the continuing deterioration of the mortgage market.
 
As a result, Freddie said it is  seriously considering  cutting in half its dividend in the fourth quarter and has hired Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. as financial advisers to help it examine possible new ways of raising capital.
 
The quarterly loss was the largest ever for Freddie Mac which, like its larger government-sponsored competitor Fannie Mae and a number of large investment banks, has been hurt in recent months by rising defaults on home mortgages. Last week, Fannie Mae reported a $1.4 billion third quarter loss.