Freddie Mac seeks $146 million in aid to stay solvent

WASHINGTON Fri Mar 9, 2012 10:30am EST

The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo. REUTERS/Jason Reed/Files

The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo.

Credit: Reuters/Jason Reed/Files

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WASHINGTON (Reuters) - Freddie Mac requested $146 million from the U.S. Treasury in order help make interest payments on government loans used to keep the mortgage buyer afloat, the company said Friday.

Although Freddie Mac reported $619 million in net income in the fourth quarter of 2011 as well as other income of $887 million, it was not enough to make the $1.7 billion interest payment it was required to make to the government.

Freddie Mac and sister company Fannie Mae were seized by the government at the height of the financial crisis and placed under conservatorship. Since then, Freddie Mac has had to seek $72.3 billion in federal aid in order to stay solvent.

As required under the terms of the takeover, Freddie must make 10 percent dividend payments on the government loans every quarter, similar to how credit card borrowers must make minimum monthly repayments. So far, it has paid about $16.5 billion in cash dividends to the Treasury.

Freddie Mac's Chief Executive Charles Haldeman, who is planning to step down as CEO in October, said the company cut about $180 million in expenses over the last two years as part of an effort to "protect" taxpayers' aid.

Freddie Mac and Fannie Mae, which provides funding for home loans, have soaked up about $170 billion in taxpayers' money since the companies were taken over.

Last week, Fannie Mae said it would seek $4.6 billion in government funds due to losses related to its legacy portfolio of bad loans.

(Reporting By Rachelle Younglai; editing by Jeffrey Benkoe)

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Comments (3)
Harry079 wrote:
Funny we are not seeing this story splashing around the networks.

Government entitiy needs to borrow more money from a government entity because it can’t affortd to pay the interest it borrowed from that government entitiy.

Mar 09, 2012 11:12am EST  --  Report as abuse
Harry079 wrote:
“interest on the money it borrowed”

Mar 09, 2012 12:22pm EST  --  Report as abuse
Kevin5069 wrote:
They just keep sticking it to tax payers.

Mar 09, 2012 2:08pm EST  --  Report as abuse
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