Freddie Mac's net interest income and management and guarantee income of $2.7 billion were swamped by its non-interest losses of $12.1 billion, the bulk of which were a $9.1-billion impairment of its securities. It also took a hit from $6 billion in credit losses and a $1.1 billion loss on loans to Lehman Bros.
This report, coupled with Fannie Mae's $29-billion quarterly loss, reported on Monday, are raising questions as whether the terms of the conservatorship are working for the GSEs. There have been calls for a loosening of terms--much like the way AIG's bailout was restructured. Equally loud, though, are those voices calling for reanalysis of the GSEs' role in mortgage finance and whether it is worthwhile to salvage their operations.
For more on the bailout, check out:
Real Estate Forum's: "Can $700 Billion Unclog the Credit Spigot?"
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
