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Freddie Mac Posts Fourth Straight Loss, Cuts Dividend

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

Aug. 6 (Bloomberg) -- Freddie Mac, the U.S. mortgage-finance company hobbled by record foreclosures, will slash its dividend at least 80 percent after posting a quarterly loss that was three times wider than analysts' estimates.

Freddie dropped 11 percent in early New York Stock Exchange composite trading after reporting a second-quarter net loss of $821 million, or $1.63 a share, compared with the 54 cents a share average estimate of nine analysts in a Bloomberg survey. The common-share dividend will be reduced to 5 cents or less from 25 cents, the second cut in nine months, McLean, Virginia-based Freddie said today in a statement.

Credit-related expenses doubled from the first quarter to $2.8 billion and Freddie wrote down the value of subprime and low-quality mortgage securities by $1 billion as the biggest housing slump since the Great Depression increased delinquencies. Freddie Chief Executive Officer Richard Syron said he still plans to raise capital after U.S. Treasury Secretary Henry Paulson was forced to step in with a rescue plan to restore confidence in Freddie and the larger Fannie Mae.

``This correction is more severe than what we've seen in the recent past,'' said Christopher Whalen, co-founder of independent research firm Institutional Risk Analytics in Torrance, California. ``Both Fannie and Freddie are going to be profoundly insolvent by the time we're done with this.''

Stock Drops

Freddie has plunged 76 percent this year on the New York Stock Exchange on concern the company may not have enough capital to overcome loan delinquencies on the $2.2 trillion of mortgages it owns and guarantees. Syron, 64, agreed to raise $5.5 billion in equity though failed to complete the sale as the stock slumped.

``We remain committed to raising $5.5 billion of new capital and will evaluate raising capital beyond this amount depending on our needs and as market conditions mandate,'' Syron said in today's statement.

Freddie fell 86 cents to $7.18 at 8:10 a.m. in New York. Washington-based Fannie, scheduled to report earnings Aug. 8, dropped $1.40, or 10 percent, to $12.20.

How can a company make a loss and still pay a dividend????

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Guest DissipatedYouthIsValuable

Don't want to be collapsing the equities markets all at once.

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They may do later ;)

Freddie Mac says at early stages of credit losses

http://www.reuters.com/article/BANKSL/idUSN0644032120080806

WASHINGTON (Reuters) - Freddie Mac is at an early stage of eventual credit losses on its home-loan investments even though the market downturn might have hit its mid-point, the mortgage finance source's chief business officer Patti Cook said on Wednesday.

"Credit losses continue to accelerate in our single-family (guarantee) business," Cook told investors on a conference call.

"While we may be roughly half-way through the eventual decline, we are still in the early stages of realized defaults," she said. "Most of the expected (credit) losses are yet to be realized."

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This is good really, it's one of the ways to lower cash to debt ratios making the share price

more attractive to investors.

The loss so far for freddie is $821Mm 2Q and $151m in the first 1Q

So $972m = £499m

Northern Rocks losses so far this year are £585.4m

Which just shows how bad the UK is, with a tenth of the debt we have lost more money.

Edited by maxwell

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This is good really, it's one of the ways to lower cash to debt ratios making the share price

more attractive to investors.

The loss so far for freddie is $821Mm 2Q and $151m in the first 1Q

So $972m = £499m

Northern Rocks losses so far this year are £585.4m

Which just shows how bad the UK is, with a tenth of the debt we have lost more money.

Only hindsight will reveal that, we are only just beginning.

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Guest DissipatedYouthIsValuable
This is good really, it's one of the ways to lower cash to debt ratios making the share price

more attractive to investors.

The loss so far for freddie is $821Mm 2Q and $151m in the first 1Q

So $972m = £499m

Northern Rocks losses so far this year are £585.4m

Which just shows how bad the UK is, with a tenth of the debt we have lost more money.

Depends on how honest we are being.

Yanks, can't trust them.

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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