Nov 25, 2007

Freddie Mac

Part of a series The Great American Write-Down

Freddie Mac (FRE) reported a $2 billion loss in the third quarter, the TIMESONLINE.COM report that Freddie’s losses are $4.8 billion. From there Press Release Freddie lost $4.6 billion in the first three quarters of 2007. What isn’t getting press is that they lost $8.1 billion in net asset value in just the third quarter. Another quarter like that and they will be in non-compliance of the regulatory minimum capital requirement of $8.5 billion in excess capital. Just another $600 million and they will break the 30 percent mandatory target capital surplus directed by the Office of Federal Housing Enterprise Oversight (OFHEO. They are also in need of immediate funding putting their dividend at risk; both Freddie and Fannie are contemplating issuing convertibles or more stock, further diluting their shares value.

Freddie Mac Reports Third Quarter 2007 Net Loss of $2.0 Billion or $3.29 Per Diluted...
Fannie, Freddie rout seen hurting major investorsUPDATE 1-Freddie Mac sued over mortgage problems