The Real Deal Miami

Huge Freddie Mac loss casts pall over market 

August 07, 2008 07:55AM

The news that Freddie Mac reported $2.8 billion in credit expenses tied to delinquencies and foreclosures and a $1 billion drop in the value of its mortgage-backed securities has analysts worried that the real estate market has yet to hit bottom. The losses at the mortgage giant could lead to higher interest rates. Freddie Mac warned in an SEC filing that “there is a significant possibility that continued adverse developments” could cause it to drop below government-mandated capital levels. The company lost $821 million during April, May and June, compared to a $729 million profit during the same period last year.