Mortgages

Freddie Mac Sees Losses Narrow Significantly Due to Fewer Delinquencies

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Freddie Mac Sees Losses Narrow Significantly Due to Fewer DelinquenciesThe fourth quarter of 2010 saw Freddie Mac cut losses significantly, down to just $113 million, according to a report from the Wall Street Journal. This was mainly due to the company having to set aside considerably fewer funds to offset losses to delinquent and defaulted mortgages. Loan loss provisions slipped to $3.1 billion during the quarter, down from $7.1 billion in the same period a year before. That was also a large decrease even from the $3.73 billion in provisions from the third quarter.

For the year, Freddie saw losses of $14 billion, though that too was an appreciable decrease from the $21.6 billion experienced in 2009, the report said. This was largely due to an overall decline in the delinquency rate for most of the year. Late payments finished the year at 3.84 percent of all accounts, down from 3.87 percent in the same quarter in 2009.

[Resource: Misconceptions May Keep Homeowners From Getting Low-rate Refi’s]

Both Freddie Mac and Fannie Mae, which back about half of all mortgages in the nation altogether, have been under government control since 2008. They recently received a mandate from lawmakers to cut their losses significantly in an effort to save American taxpayers money.

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