Freddie Mac (FMCC)

[Shomidamoni]

http://news.yahoo.com/s/nm/20090123/bs_nm/us_freddiemac_outlook_loss

NEW YORK (Reuters) – Freddie Mac (FRE.P), the second-largest provider of funding for U.S. home loans, on Friday said expected fourth-quarter losses may force it to draw up to $35 billion from the U.S. Treasury to maintain a positive net worth.

The estimated draw means Freddie Mac may post a loss exceeding the record $25.3 billion for the third quarter, which reduced shareholders' equity to a negative $13.8 billion.

The Treasury closed the deficit with a purchase of senior preferred stock, a facility formed by the government as it seized Freddie Mac and home funding rival Fannie Mae (FNM.P) in conservatorship in September.

The amount of the capital infusion "reflects management's current estimate of the impact on the company's net worth in the fourth quarter," Freddie Mac said in a filing with the Securities and Exchange Commission.

The request would be made by its regulator, the Federal Housing Finance Agency, Freddie Mac said. The actual draw could vary widely as it finalizes financial statements, it added.

Freddie Mac would be using about half of its $100 billion Treasury lifeline that was put in place to ensure the company can continue its role as provider of funds for U.S. housing, which is in its worst downturn since the 1930s.

Other sources of funding have shriveled during the credit crunch, enhancing the importance of liquidity from Freddie Mac, Fannie Mae and the Federal Home Loan Banks.

Freddie Mac's fourth-quarter results will likely show risky mortgages held in portfolio drove most losses, Barclays Capital analyst Rajiv Setia said this week.

But increased delinquencies on loans earmarked for Freddie Mac's guaranteed mortgage security business have also deepened the loss, he added.

Delinquencies on loans backed by Freddie Mac rose 0.2 percentage point in December to 1.72 percent, more than double that at the start of 2008, the company said earlier on Friday.

Shares of Freddie Mac and Fannie Mae have traded mostly below $1 since September as terms of the conservatorship nearly wiped out common and preferred shareholders. The debt of the companies has been buoyed by a Treasury backstop, and a Federal Reserve purchase program.

Treasury injections will likely keep the companies operating as government entities for years, as they struggle to service costs and provide money for U.S. housing, Setia said in a Tuesday conference call.

Before the conservatorships, the companies operated as quasi-government "agencies," where they relied on charters from Congress but answered to shareholders.

Freddie Mac in its filing also said it has agreed to let JPMorgan Chase & Co (JPM.N) assume servicing rights to mortgages formerly under the control of Washington Mutual Inc.