Freddie Reports $3.1B Loss for '07

Freddie Mac has reported a net loss of $3.1 billion for 2007 ($5.37 per share), compared with net income of $2.3 billion ($3.00 per share) in 2006. In the fourth quarter, Freddie Mac lost $2.5 billion ($3.97 per share), compared with a net loss of $401 million ($0.73 per share) a year earlier. During the quarter, Freddie Mac took mark-to-market losses of $2.3 billion on its derivatives portfolio and $800 million on the value of its credit guarantee asset. Credit losses totaled $499 million for the full year, including $236 million reported in the fourth quarter and $126 million in the third quarter. As a result of the problems in the U.S. housing market, Freddie has increased its total credit loss estimates to $2.2 billion for this year and $2.9 billion for 2009. Freddie Mac said it had estimated regulatory core capital of $37.9 billion as of Dec. 31, 2007, which was $11.4 billion in excess of its regulatory minimum capital requirement and $3.5 million in excess of the 30% mandatory target capital surplus mandated by the Office of Federal Housing Enterprise Oversight.