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Freddie Mac needs another $10.6 billion

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- Freddie Mac on Wednesday requested another $10.6 billion handout from the federal government.

The housing finance company, which reported an $6.7 billion quarterly loss, was put into conservatorship by the government during the height of the financial panic in September 2008 along with its twin Fannie Mae (FNM, Fortune 500). Freddie also paid a $1.3 billion dividend payment to Treasury, which received stock at the time of the takeover.

Freddie has already received $50.7 billion from the Treasury Department. Fannie Mae has so far gotten $76.2 billion.

Since the housing collapse began in 2008, Freddie and Fannie have been propping up the mortgage market. The Obama administration, which has used the companies to support its foreclosure prevention efforts, is currently examining the future structure of the firms.

The two companies essentially have been given a blank check from the government since Treasury in December lifted a $200 billion limit on the backstop for each.

Freddie suffered a $10 billion loss the first quarter a year ago and a fourth-quarter loss of $6.5 billion. But an accounting change this year makes comparisons difficult.

One bright spot: The single-family delinquency rate at Freddie (FRE, Fortune 500) dipped to 4.13% as of March 31, down from 4.2% in February. That's still up from 3.98% at the end of 2009.

The McLean, Va.-based company said it helped more than 71,000 families avoid foreclosure during the quarter and financed more than 390,000 homes and 50,000 units of rental housing. It also helped refinance $68 billion of single-family loans.

Chief Executive Charles Haldeman Jr. said he was cautiously optimistic about the future.

"Though more needs to be done, we are seeing some signs of stabilization in the housing market, including house prices and sales in some key geographic areas," Haldeman said. "But as we have noted for many months now, housing in America remains fragile with historically high delinquency and foreclosure levels, and high unemployment among the key risks." To top of page

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