Tough end of 08 for Mac and Mae
(13 March 2009 – USA) Both US home lenders Fannie Mae and Freddie Mac have ended a tough year, each with fourth quarter losses exceeding US$20 billion.
Freddie Mac this week came out with a fourth quarter net loss of US$23.9 billion, to go with a third quarter loss of US$25.3 billion.
In February, Fannie Mae reported similar losses of $25.2 billion in the fourth quarter, a sevenfold increase from the $3.56 billion in the year-ago period.
For Freddie Mac, full-year 2008 net loss was $50.1 billion, compared to a net loss of $3.1 billion, in 2007.
Freddie Mac’s losses were driven primarily by net mark-to-market declines on the company’s derivative portfolio, guarantee asset and trading securities; increased credit-related expenses; and security impairments.
Non-interest loss for the fourth quarter of 2008 was US$19.4 billion, compared to US$12.2 billion in the third quarter of 2008. Other non-interest loss for the full-year 2008 was $32.5 billion, compared to $2.9 billion for the full-year 2007
Freddie Mac said that it was still a vital part of the US economy. In 2008, it purchased or guaranteed more than US$460 billion in mortgage loans and mortgage-related securities, helping to finance more than 1.7 million single-family homes and 620,000 units of rental housing.
Earlier in March, Freddie Mac’s CEO became another casualty of the global financial crisis. It was announced that David Moffett would quit after only six months in charge.
In replacement, John A. Koskinen was announced as the company’s interim chief executive officer and Robert R. Glauber its interim non-executive chairman.
In February, Fannie Mae reported similar losses of $25.2 billion in the fourth quarter, a sevenfold increase from the $3.56 billion in the year-ago period.
For Freddie Mac, full-year 2008 net loss was $50.1 billion, compared to a net loss of $3.1 billion, in 2007.
Freddie Mac’s losses were driven primarily by net mark-to-market declines on the company’s derivative portfolio, guarantee asset and trading securities; increased credit-related expenses; and security impairments.
Non-interest loss for the fourth quarter of 2008 was US$19.4 billion, compared to US$12.2 billion in the third quarter of 2008. Other non-interest loss for the full-year 2008 was $32.5 billion, compared to $2.9 billion for the full-year 2007
Freddie Mac said that it was still a vital part of the US economy. In 2008, it purchased or guaranteed more than US$460 billion in mortgage loans and mortgage-related securities, helping to finance more than 1.7 million single-family homes and 620,000 units of rental housing.
Earlier in March, Freddie Mac’s CEO became another casualty of the global financial crisis. It was announced that David Moffett would quit after only six months in charge.
In replacement, John A. Koskinen was announced as the company’s interim chief executive officer and Robert R. Glauber its interim non-executive chairman.
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