Freddie Mac lost $4.7 billion in the second quarter, an improvement from the prior period, but bad enough that the GSE is asking the Treasury for $1.8 billion in assistance to keep its net worth position in the black.
When dividend payments to Treasury are factored in, the company actually lost $6 billion. In 1Q it lost just shy of $8 billion, including dividend payments. In the second quarter of 2009 Freddie had red ink of $840 million.
The GSE said lower derivative losses and provisions for loan losses were the primary reasons for the improvement from 1Q.
The serious delinquency rate on its $1.8 trillion single-family guarantee portfolio fell 17 basis points to 3.96% in the second quarter, largely due to what it called "seasonal factors, loan modifications and foreclosures."
Even though serious delinquencies improved, loan charge-offs increased to $3.9 billion, from $2.8 billion in the first quarter, driven by higher volumes of short sales and foreclosures.
Freddie's real estate owned (REO) inventory grew by 15% on a sequential basis to $6.2 billion at June 30.
The company reported $40 million in income from its REO sales, which "reflected the recovery of prior period write-downs due to improved REO fair values during the second quarter."
On Friday, its sister company, Fannie Mae reported a net loss of $1.2 billion for 2Q.
