McLEAN, Va. – Secondary mortgage market giant Freddie Mac reported a first quarter loss of $151 million yesterday, its third straight quarterly loss, and plans to raise $5.5 million in new capital to replenish some of the losses.
The first quarter loss is higher than the $133 million loss for last year’s first quarter, but was smaller than expected, causing a rally in the company’s share price. The shares were up more than 8% yesterday to close at $27.12.
The latest results include $1.4 billion in credit-related expenses and $528 million in total credit losses, including net charge offs and real-estate-owned operations expense, as delinquencies and foreclosures continue to rise and estimated losses were increased. Year-earlier credit costs were $262 million.
Freddie’s report comes a week after its sister mortgage company, Fannie Mae, reported a $2.2 billion first quarter loss and plans to raise as much as $6.5 billion in new capital.
The two companies are major sources of liquidity for credit unions and buy more than three-fourths of all residential mortgages sold on the secondary market.
