Freddie Predicts 'Credit Costs' of $16 Billion

Freddie Mac officials, noting that they are being "conservative" in their loss estimates, on Tuesday forecasted $16.4 billion in future "credit costs" to cover writedowns but believe the actual loss experience will be $10 billion to $12 billion.Discussing its poor third quarter performance, company officials predicted dismal fourth quarter results as well. It also was hinted that Freddie tried to obtain a regulatory waiver on maintaining a 30% excess capital ratio but was rejected by the Office of Federal Housing Enterprise Oversight. All the bad news was not what stock analysts wanted to hear. During the conference call, company CEO and chairman Richard Syron suggested that a preferred stock offering to bolster its capital position was imminent.