Freddie Mac asks government for $30.8 billion

March 11, 2009 – 10:53 pm – No Comment

Freddie Mac reported a $50 billion loss last year and is now asking the government for nearly $31 billion in aid to help with the giant loss.

This also comes just a day after Bernake said that the government would not allow big banks to fail. Also, the government has already taken a huge stake in both Freddie Mac and Fannie Mae since both companies hold the majority of United States mortgages, including those that have or are failing.

Both Freddie and Fannie (who asked for $15 billion just a few weeks ago) will get the money that they are asking for. The treasury department pledged $400 billion.

Freddie’s request for $30.8 billion in federal aid comes on top of $13.8 billion the McLean, Va.-based company received last year. Freddie Mac was forced to go back, hat-in-hand, because its net worth — the value of its assets minus the value of its liabilities — fell below zero.

The recent loss was driven by $13.2 billion in hedged trades, $7.2 billion in credit losses from the declining housing market conditions and $7.5 billion in writedowns of the value of its mortgage-backed securities. The company also took a charge of $8.3 billion for now-worthless tax credits.

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