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Wednesday, May 14, 2008
Freddie Mac Posts $151M Loss in First Quarter
FOXBusiness
Freddie Mac. the nation’s second-largest mortgage finance company, posted a first quarter loss of $151 million, or 66 cents a share. The company also said it plans to raise $5.5 billion in fresh capital.
However, the loss is not as wide as analysts expected. Shares of Freddie Mac (FRE) rose more than 4% in early trading.
Freddie said the $5.5 billion in new capital will be used to recoup losses from the subprime mortgage mess.
Freddie Mac and its sister-company Fannie Mae (FNM) both took massive losses in the past several months because of the mortgage problems throughout the country. Fannie also gained in early trading.
However, both companies also indirectly benefited because of the government's guarantee on Fannie and Freddie's assets, which have made them more attractive for mortgage borrower in times of financial insecurity.
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