Freddie Mac Reports First Quarterly Loss In Four Years

By MarketWatch Pulse

Freddie Mac , the mortgage buyer under government conservatorship, on Tuesday said it lost $475 million in the third quarter, its first loss in four years, after earning $4.17 billion in the prior-year quarter. Freddie Mac blamed the loss on the mark-to-marking of derivatives as interest rates declined. Freddie Mac's regulator, the Federal Housing Finance Agency, said more losses were a possibility for both Freddie Mac and Fannie Mae . "Volatility in interest rates coupled with a capital buffer that will decline to zero in 2018 under the terms of the Senior Preferred Stock Purchase Agreements with Treasury will likely make both Enterprises increasingly susceptible to the possibility of quarterly losses that could result in draws going forward," said FHFA Director Mel Watt in a statement.

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