Freddie Mac loss swells as mortgage crisis deepens
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fannie mae, freddie mac, housing crisis, residential mortgage March 1st, 2008NEW YORK, Feb 28 (Reuters) - Freddie Mac, the second-biggest provider of U.S. residential mortgage funding, on Thursday said its fourth-quarter loss widened to a record $2.5 billion as the housing crisis worsened.
Freddie Mac, as well as rival Fannie Mae, suffered from soaring defaults on mortgages guaranteed by the two companies as nationwide home prices declined in 2007 for the first time since the Great Depression.
The company also warned it expected to lose billions of dollars more in upcoming quarters as the housing market slump deepens and more borrowers fall behind on payments.
Regulators have loosened restrictions on the two government-sponsored enterprises (GSEs) in the hope they will be able to prop up real estate by holding financing costs down for a bigger pool of home buyers. The GSEs hold charters from Congress to boost homeownership.
Tags: fannie mae, freddie mac, housing crisis, residential mortgage
