Freddie Mac on Wednesday said it lost $4.07 billion in the third quarter, after a $1.6 billion dividend payment to the government.
As a result of the dividend payment, Freddie had a net worth deficit of $58 million at the end of the quarter. The government-sponsored enterprise said it would seek an additional $100 million in funds from the Treasury to plug the deficit.
The net loss was smaller than in recent quarters; the GSE posted a net loss of $6.01 billion after preferred dividends during the second quarter and a $6.7 billion loss a year earlier.
Freddie said it set aside $3.73 billion during the period to cover future loan losses, down from $5.03 billion in the second quarter and $7.97 billion in the third quarter of 2009.
Loan performance improved slightly. The serious delinquency rate on single-family residential loans in Freddie’s portfolio stood at 3.8%, down 16 basis points from the second quarter, but 37 basis points higher than in the third quarter of last year. The rate of net chargeoffs in its mortgage portfolio was unchanged from the previous quarter at 0.8%, and up slightly from 0.46% in the year ago period.
To date, the government has pumped $148 billion into Freddie and its sister organization Fannie Mae, and according to a recent report from their conservator, the Federal Housing Finance Agency, future costs to keep the GSEs afloat could range between $73 billion and $215 billion.
Fannie Mae is expected to report third-quarter results later this week.
