Business News
Freddie Mac seeking 35 billion dollars more from US government
Jan 24, 2009, 2:04 GMT
Washington - Freddie Mac, the giant mortgage company under federal control, is to ask for another tranche of 35 billion dollars in federal money to stem massive losses from the mortgage default crisis, according to a securities filing Friday.
Freddie, which took 13.8 billion dollars from the US Treasury Department in November, said in the filing that its fourth-quarter losses would again drive its net worth below zero, Bloomberg financial news service reported.
The news is the latest blow in the nation's finance crisis. Earlier this week, Bank of America was eyeing a request for more government loans to shore up a 15-billion-dollar loss from its subsidiary, Merrill Lynch.
Treasury officials have pledged up to 100 billion dollars each for Freddie Mac and its sister corporation, Fannie Mae. Both are government-chartered firms which finance or buy half of all the nation's mortgages, estimated at 12 trillion dollars.
Fannie has not yet drawn on the Treasury funds, but has indicated it may have to do so after fourth quarter results for 2008. Quarterly results for both are expected in mid to late February.
In September, the US government seized control of Fannie Mae and Freddie Mac and replaced their executives as the US financial crisis came to a head.
The US has been in a recession since December 2007.
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