WASHINGTON — The continuing woes of the housing industry again took their toll on mortgage buyer Freddie Mac as it today reported that during the second quarter revenues fell 28% and the enterprise lost $821 million.
The loss represents an increase from its $528 million loss during the first quarter and prompted the firm to cut its dividend from 25 cents per share to “five cents a share or less.” During the second quarter of 2007, the Freddie Mac reported $729 million in income.
Increased delinquency rates, more foreclosures and declining home prices caused the write-down of $2.5 billion in credit-loss provisions.
Although the firm had $37.1 billion in core capital, $8.4 billion more than required by law, the firm has said it plans to raise $5.5 billion in new capital.
Freddie and Fannie Mae, which are government-sponsored enterprises, own or guarantee $5.2 trillion worth of home mortgages, about half of all outstanding mortgage loans. The housing bill signed by President Bush last week contains provisions allowing the Treasury Department to buy capital in the enterprises if they are in need of additional capital and can't get it from other sources.
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