- Robert Larsen 2/24/2010
Freddie Mac 4Q Loss Narrows
Freddie Mac posted a smaller loss last year than in 2008 and said for the third consecutive quarter that it won’t need to ask the government for additional bailout funds. But the company says conditions could worsen as foreclosures pick up later this year.
The mortgage company posted a net loss of $6.5 billion in the fourth quarter of 2009 and $21.6 billion for the full year, excluding dividends paid to the government. While those losses remain daunting, they are an improvement from 2008, when the company posted a loss of $23.9 billion in the year ago fourth quarter and $50.1 billion for all of 2008.
The improvement came amid early signs of stabilization in the housing market. The company estimated that home prices fell 0.8% last year, versus an 11.7% decline in 2008. Still, Freddie Mac Chief Executive Charles E. Haldeman Jr. warned in a statement that the housing recovery “remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures.” (Full Story…)
U.S. Mortgage Delinquencies Edge Down
Fewer people fell behind on their home-mortgage payments in last year’s fourth quarter, a sign that the default crisis may be peaking, the Mortgage Bankers Association reported Friday.
Separately, the Obama administration announced plans to provide $1.5 billion to housing agencies in five states hit hardest by the crisis that would fund programs to help people avoid foreclosure.
The trade group said 3.63% of mortgage borrowers were between 30 and 59 days overdue in the fourth quarter, down from 3.79% in the third quarter, based on its quarterly survey of lenders. Normally, that rate rises in the fourth quarter as heating bills and holiday expenses cause some people to fall behind.
The decline in this category of newly delinquent borrowers reflects a drop in the number of people losing their jobs, said Jay Brinkmann, the MBA’s chief economist. (Full Story)
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