Freddie Mac Reports $2- Billion Third Quarter Loss
McLEAN, Va.-In another sign of the growing mortgage crisis, secondary mortgage market giant Freddie Mac 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 time 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 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.
CDCU Figure to Plead Guilty to Conflict Charges
HARRISBURG, Penn.-The executive director of the local housing authority has agreed to step down and plead guilty to charges he steered $835,000 to the now- defunct Greater Harrisburg Community CU to help fund the fledgling CDCU.
Carl Payne, 66, was scheduled to stand trial in federal court in January on charges he improperly used funds from the Harrisburg Housing Authority to support the credit union start-up. Payne, who was CEO of the CU, was also charged with lying about receiving $134,000 from the HHA to pay for his CU work. Payne is expected to plead guilty to misdemeanor charges related to his backdating documents to obstruct the grand jury's investigation of the case.
The credit union was shuttered by NCUA in 2006 with losses of $264,000 for the first nine months of 2005.
