WASHINGTON, May 3 (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. T he 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. T he 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.
