Freddie Mac, after battling plummeting home prices and a shaky economy, is seeking a $6.1 billion investment from the U.S. Treasury after reporting a first quarter losses.
The McLean-based housing-finance giant said that during the three months ended March 31, it lost $9.9 billion, or $3.14 per diluted share, compared with a net loss of $151 million, or 66 cents per diluted share, for the year-ago period.
Soaring levels of missed mortgage payments and falling home prices had led to soaring losses, it said.
Along with Fannie Mae, the firm holds more than half of US mortgages.
The death of finance chief David Kellermann last month and the resignation of Chief Executive Officer David Moffett in March have left Freddie Mac with no permanent managers in its top three positions as the credit quality of loans and mortgage bonds the company owns or guarantees erodes. The company reiterated that it has insufficient internal controls, which are unlikely to be fixed while the company is in conservatorship.
The director of the Federal Housing Finance Agency has asked the Treasury Department for $6.1 billion in financial backing to eliminate Freddie Mac’s net worth deficit as of March 31.
The company expects to get the funds by June 30.
Last year, Freddie Mac said it purchased or guaranteed more than $460 billion in mortgage loans and mortgage-related securities.
Freddie Mac and Fannie Mae were seized by the government in September. They financed or guaranteed nearly three quarters of new home loans last year.