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Regulators ready to cut Freddie Mac more slack

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Federal regulators say they'll give Freddie Mac more room to purchase and guarantee mortgages if the company follows through on a plan to raise billions to counter its losses. Freddie Mac narrowed its first-quarter net loss to $151 million -- down from $2.5 billion in the fourth quarter of 2007 -- but company officials said they still need to raise $5.5 billion in new capital. Freddie Mac was able to trim losses in part because of a change in accounting rules that allowed the company to stop reporting losses on certain credit guarantees that put a $1.3 billion dent in the bottom line during the fourth quarter. The company saw credit-related expenses -- including provisions for credit losses and real estate-owned operations expenses -- rise sharply during the first quarter, to $1.4 billion. That compares with $912 million in the fourth quarter. Charge-offs and real estate-owned operations expenses hit $528 million, up from $236 million in the fourth quarter. Credit losses ...