Freddie Mac Reports Loss of $821 Million

Freddie Mac (NYSE:FRE) , the second-biggest provider of U.S. residential mortgage funding, on Wednesday posted its fourth consecutive quarterly loss and set plans to slash its common stock dividend amid the steepest U.S. housing market slump since the Great Depression.

The McLean, Virginia-based company, which affirmed a commitment to raise capital, reported a second-quarter loss of $821 million, or $1.63 cents per share in the quarter, compared with a profit of $729 million, or 96 cents per share, a year earlier. It follows a $151 million loss in the first quarter of 2008, which was lessened by an accounting change.

Freddie Mac and rival Fannie Mae (NYSE:FNM) faced a storm of stock selling last month as investors speculated the companies would fall short of the capital needed to offset losses sustained from delinquent mortgages. The turmoil led U.S. Treasury Secretary Henry Paulson to arrange emergency measures that bolstered government backing for the companies.

The companies own or guarantee more than $5 trillion in mortgages, or nearly half of all U.S. home loans.

Original here