Freddie Pegs Hurricane Losses at $300M Max

Freddie Mac said it could lose up to $300 million due to property damage caused by hurricanes Katrina and Rita.The mortgage giant said the anticipated loss is tied to its guarantee of principal and interest payments on participation certificates (PCs) that are collateralized by mortgages in three of the hardest-hit states: Alabama, Louisiana, and Mississippi. Less than 1% of Freddie's guaranteed portfolio was affected by hurricane-related damage. The loss would be booked in the third quarter as a charge against earnings. "This represents most of the losses we anticipate from the hurricanes," said a company spokesman. Meanwhile, at MortgageWire's deadline, the government-sponsored enterprise announced that it would buy back up to $2 billion worth of its common stock, depending on market conditions. Freddie Mac can be found online at http://www.freddiemac.com.