Date published: August 30, 2010
On the heels of dismal second quarter results, mortgage finance giant Freddie Mac is asking for more taxpayer money to continue operations.
The government-sponsored enterprise (GSE) finance firm posted a loss of $6 billion for the second quarter. Following the loss. Freddie Mac said it would need another $1.8 billion from taxpayers. If it gets the money, ABC News reported, its total request for taxpayer funds since the government takeover would rise "to more than $64 billion."
In a press release on its financial outcomes for the second quarter, Freddie Mac announced: "The Federal Housing Finance Agency (FHFA), as Conservator, will submit a request on the company's behalf to Treasury for a draw of $1.8 billion under the Senior Preferred Stock Purchase Agreement."
With Freddie Mac and its sister GSE Fannie Mae supplying nearly all of the liquidity in the housing market, the federal government has at its disposal large market "levers" that it can use to achieve its social goals of "affordable housing" for low income families. Efforts to use these "levers" to achieve that goal contributed heavily to the current recession, and likely could continue to have a deleterious impact in the future.