FM Watch, the coalition of major lenders and mortgage insurers formed to confine Fannie Mae and Freddie Mac to the secondary mortgage market, said Freddie Mac's second-quarter earnings included a $1 billion writedown that could prove harmful for taxpayers.

The coalition said the $1 billion reduction by Freddie in the value of its asset-backed securities available for sale "reduced their shareholders' equity by 3% in just three months."

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