WASHINGTON (Reuters) - Freddie Mac , the No. 2 provider of U.S. mortgage money, said on Thursday it will seek another $19 million in taxpayer aid after its quarterly profit failed to make up for a dividend payment to the government for its controlling stake.
Net income fell to $577 million from $676 million in the year-ago quarter. The drop was mainly due to derivatives losses totaling $1.06 billion, up from $427 million a year earlier and $766 million in the previous 3-month period.
Still, the $19 million from the U.S. Treasury in the first quarter is less than the $146 million needed in the last quarter of 2011.
Freddie Mac and larger rival Fannie Mae , which own or guarantee about 60 percent of U.S. home loans, have been sustained by taxpayer support since the government seized them at the height of the financial crisis in September 2008.
In the first quarter, the company and its federal regulator focused more on "shifting risk to private investors" and reducing the size of the government's role in the housing finance market, Freddie Mac Chief Executive Charles Haldeman said in a statement.
Freddie Mac has now tapped $72.3 billion in Treasury aid and paid $18.3 billion to the government in dividends. The company said the money owed to the government from cash infusions will drive future losses.
Fannie Mae, which has yet to report quarterly results, has borrowed more than $116 billion from the government and paid almost $20 billion via dividends.
Both companies do not directly make loans to consumers. Rather, they buy and insure mortgages from banks, freeing up cash for more lending.
(Reporting by Margaret Chadbourn; editing by Chizu Nomiyama and Jeffrey Benkoe)
Net income fell to $577 million from $676 million in the year-ago quarter. The drop was mainly due to derivatives losses totaling $1.06 billion, up from $427 million a year earlier and $766 million in the previous 3-month period.
Still, the $19 million from the U.S. Treasury in the first quarter is less than the $146 million needed in the last quarter of 2011.
Freddie Mac and larger rival Fannie Mae , which own or guarantee about 60 percent of U.S. home loans, have been sustained by taxpayer support since the government seized them at the height of the financial crisis in September 2008.
In the first quarter, the company and its federal regulator focused more on "shifting risk to private investors" and reducing the size of the government's role in the housing finance market, Freddie Mac Chief Executive Charles Haldeman said in a statement.
Freddie Mac has now tapped $72.3 billion in Treasury aid and paid $18.3 billion to the government in dividends. The company said the money owed to the government from cash infusions will drive future losses.
Fannie Mae, which has yet to report quarterly results, has borrowed more than $116 billion from the government and paid almost $20 billion via dividends.
Both companies do not directly make loans to consumers. Rather, they buy and insure mortgages from banks, freeing up cash for more lending.
(Reporting by Margaret Chadbourn; editing by Chizu Nomiyama and Jeffrey Benkoe)
0 comments
Post a Comment