GSE Posts $23.9B Loss, FHFA Requests Aid

Freddie Mac posted a $23.9 billion loss in the fourth quarter, noting that its regulator has filed a request with the U.S. Treasury for $30.8 billion in new funding to maintain the GSE's net worth position above zero. For the full year, Freddie lost a stunning $50.8 billion, a record for the company which has been operating under a federal conservatorship since last summer. Two weeks ago Freddie's fellow GSE, Fannie Mae — also a ward of the government — reported a 4Q net loss of $25.2 billion and full year loss of $58.7 billion. Freddie's new CEO John Koskinen blamed the quarterly loss on mark-to-market accounting adjustments of $13.3 billion, and problems in its derivatives portfolio, among other items. The mortgage investing giant also cited credit-related charges on its residential portfolio. The firm cited rising delinquencies, weak labor markets, and "steeper" declines in home prices. Freddie and Fannie together invested in well over $200 billion in subprime-related securities during the height of the nonprime boom.