Freddie Mac has become the latest high profile company to suffer from the consequences of the US sub-prime mortgage crisis. The government sponsored company is supposed to boost the mortgage industry by buying and guaranteeing mortgages, thereby promoting home ownership.
However, the company released its third quarter figures recently, showing a £970 million loss, a £4 billion decrease in the value of its assets, as well as a provision against bad loans of £600 million. Meanwhile, its share price has also plummeted by 25 per cent to $28.07, its lowest point in a decade. As a result, shareholders’ dividends may be half of what they were previously.
Meanwhile, the company also revealed its core capital stands at £17 billion, though that figure is less than £300,000 above the government’s 30% mandatory target for its financial surplus.
US Government Backed Loan Company Makes USD2 Billion Loss
US Government Backed Loan Company Makes USD2 Billion Loss
Mon, 26 Nov 2007
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