Industry NewsMortgage

Freddie Mac must raise capital as losses grow

Loan modifications, short sales up in Q2
Published on Aug 6, 2008

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by CareyBot

Government-chartered mortgage financier Freddie Mac posted an $821 million net loss in the second quarter, bringing losses for the last 12 months to nearly $1.6 billion.

The news raised concerns that the company will have to raise more capital than the $5.5 billion it pledged to raise in May, which could restrict future purchases of mortgages. The company announced it will cut common stock dividends from 25 cents to 5 cents per share, but announced no timetable for raising new capital by issuing stock and securities.

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