Freddie Mac posts heavy losses in Q3

The mortgage-finance company traced the loss to $14.3 billion in tax charges; Freddie Mac declared the tax credits listed on its balance sheet useless as it is unlikely to generate sufficient taxable income in the upcoming quarters to use them.

Mortgage securities writeoffs were to blame for $9.1 billion in losses and home foreclosures and rising mortgage delinquency levels led to an additional $6 billion charge.

This result compares to a loss of $1.2 billion in the corresponding period last year.

On September 7, the Federal Housing Finance Agency (FHFA) assumed control over the assets and management of both Freddie Mac and Fannie Mae under a process called conservatorship. The FHFA noted the need to intervene as the risk of default by the government-sponsored entities would have led to a severe disruption in global financial markets and exacerbated the mortgage market's already severe woes.

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