Blog
August 10th, 2009

Freddie Posts Profit. Really?

by

 

The news that government-controlled mortgage giant Freddie Mac posted a second-quarter profit offers the hope that money can once again be made in mortgage lending. It also bodes well that “at this time,” says Freddie, they won’t be asking the government for any additional taxpayer money (emphasis added):

McLean, Virginia-based Freddie Mac rose 54 cents, or 73 percent, to $1.28 at 10:31 a.m. in New York Stock Exchange composite trading after earlier climbing to $1.42. The shares had been trading under $1 for most of the past year.

Freddie Mac booked net income of $768 million in the second quarter on Aug. 7, attributing much of that profit on one-time accounting adjustments, mark-to-market gains due to the rise in interest rates and lower funding costs stemming from its federal financing plan.

“Our financial results allowed us to finish the quarter with a positive net worth, meaning we will not need to request any additional financial support from the government at this time,” John Koskinen, the company’s interim chief executive officer, said in an Aug. 7 statement.

“Granted, Freddie is the smaller cousin to the larger Fannie Mae, but the fact that Freddie registered a quarterly profit raises the hope that there will once again be money to be made in the mortgage-lending industry,” said HSH VP Keith Gumbinger.

On the other hand, the larger, more influential Fannie Mae has, after reporting its eighth consecutive quarterly loss, requested additional taxpayer support:

Washington-based Fannie Mae said its regulator requested US$10.7bil from the Treasury to erase a deficit in its net worth, bringing total draws under a senior preferred stock purchase programme to US$45.9bil.

Share and Enjoy:
  • email
  • Print
  • RSS
  • Add to favorites
  • Yahoo! Bookmarks
  • Facebook
  • Twitter
  • Technorati
  • Digg
  • del.icio.us
  • Google Bookmarks
  • StumbleUpon
  • Yahoo! Buzz
  • Mixx
  • BlinkList
  • Live
  • Reddit

One Response to “Freddie Posts Profit. Really?”

  1. Cliffard Hamilton Says: May 27th, 2010 at 5:44 pm

    Send me more information about Freddie and Fannie. Would like to buy some stocks.

Leave a Comment

Receive Updates via Email

Delivered by FeedBurner

About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

Connect With Us

  • rss feed icon
  • facebook icon
  • twitter icon

Compare Lowest Mortgage Rates

$