Freddie Mac escaped the second fiscal quarter without asking the US government for any new financial aid, but still expects to need more federal help in the future.
The government-run mortgage finance company on Friday posted a quarterly loss of US$374 million, or US$0.11 a share, including US$1.1 billion in dividends paid to the government. Excluding those payments, the company would have earned US$768 million. In the year-ago period, Freddie lost US$1.05 billion, or US$1.63 a share.
The company was able to maintain a positive net worth of US$8.2 billion in the quarter ended June 30. As a result, it did not need to seek funding from the Treasury Department, which has provided Freddie Mac with US$51 billion since the takeover last September.
The government has pledged up to US$400 billion in aid for Freddie Mac and its sibling Fannie Mae. The two companies play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about US$5.4 trillion. That’s about half of all US home mortgages.
“While we are seeing some early signs pointing to a housing recovery — including a modest uptick in house prices in some markets — our outlook remains cautious due to rising foreclosures, growing unemployment, tight lending standards and buyers’ reluctance to re-enter the market,” John Koskinen, Freddie Mac’s interim CEO, said in a statement.
Revenue for the quarter totaled US$7.5 billion, compared with US$1.6 billion a year earlier.
Reeling from losses from the housing bust, Fannie Mae and Freddie Mac have received a combined US$96 billion in taxpayer aid, including nearly US$11 billion requested by Fannie Mae in the past week. That is surpassed only by insurer American International Group Inc, which has received US$182.5 billion in financial support from the government.
AIG reported its first quarterly profit since 2007 on Friday, as the government-controlled insurer saw the value of some of its soured assets recover.
AIG said results at its core insurance operations fell during the second quarter due to the weak economy, a trend reported by other insurers. AIG said it earned US$1.82 billion. Total revenue rose 48 percent, to US$29.53 billion from US$19.93 billion a year earlier.
Chairman and CEO Edward Liddy said in a prepared statement that company was still contending with the effects of the company’s near-collapse last fall.
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