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Thursday 13th of May 2010
May 6, 2010    

Freddie Mac seeks further $10.6bn bailout

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by Kay Murchie
Freddie Mac seeks further $10.6bn bailout

US mortgage giant Freddie Mac, which was taken over by regulators at the height of the financial crisis, has asked for a further $10.6 billion in state aid.

The company, which announced a $6.7 billion dollar loss in the first quarter, said it would need the new funding by the end of June.

The latest request brings the total cost of Freddie Mac’s bailout to $61.3 billion (£40.4 billion).

Earlier this week, chief executive Charles Haldeman said the firm was looking to strengthen its underwriting standards and improve credit quality.

In a statement, he said: “Though more needs to be done, we are seeing some signs of stabilisation in the housing market, including house prices and sales in some key geographic areas.

“But as we have noted for many months now, housing in America remains fragile with historically high delinquency and foreclosure levels, and high unemployment among the key risks,” he added.

In September 2008, Freddie Mac and its larger sister organisation, Fannie Mae, were brought under tighter Government control, in a rescue package that was designed to support the crucial US housing market.

Both companies hit trouble during the US property boom, when many sub-prime mortgages were not repaid.

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