Government-controlled mortgage giant Freddie Mac posted a meager $113 million net loss in the fourth quarter — but actually earned $1.2 billion before having to pay the U.S. Treasury a hefty $1.6 billion dividend payment.
However, roughly $1.6 billion of the operating profit includes a hedging gain.
Meanwhile, an hour after Freddie reported, Fannie Mae posted an operating profit of $73 million for 4Q, a number that excludes that GSE's $2.1 billion dividend payment to Treasury. (In other words, it lost money.)
Freddie is asking Treasury for a $500 million draw to keep its net worth position above zero.
Freddie reported that it had a "net worth deficit of $401 million at Dec. 31, 2010 due to several contributing factors including its $1.6 billion quarterly dividend payment to Treasury, which exceeded total comprehensive income for the fourth quarter. To eliminate this deficit, the FHFA, as conservator, will submit a $500 million draw request to Treasury. Including the amount to be requested from Treasury, the aggregate liquidation preference of the senior preferred stock will increase to $64.7 billion."
The GSE noted that new single-family loans purchased in 2009 and 2010 "continue to demonstrate strong credit quality based on borrower credit scores and loan-to-value ratios. The single-family serious delinquency rate of 3.84% at Dec. 31, 2010 remains below industry benchmarks."
