Relevant:
- Freddie Mac posts $354M "Don't Worry, It's Just Derivatives" loss; Cuts Dividend; Won't Draw on Treasury
- Obama To Nominate Mel Watt For FHFA Director
- Freddie Mac Reports Quarterly Loss, Seeks $500 Million in Government Aid
- Gov't seeks smaller role for Fannie, Freddie
- Regulator Faults Single-Family Loans in Fannie, Freddie Losses
2015-11-03 — go.com
The head of the federal agency that oversees Fannie and Freddie raised the possibility that future quarterly losses could mean they would have to receive further government aid. Volatile interest rates and reduced capital cushions for the two companies, under their agreements with the government, "will likely make both enterprises increasingly susceptible to the possibility of quarterly losses that could result in draws" from the Treasury, Mel Watt, director of the Federal Housing Finance Agency, said in a statement Tuesday.
Watt noted that Freddie's third-quarter loss wasn't due to a deteriorating risk profile of mortgages or an increase in losses related to repayment risk, but rather to volatility in interest rates as reflected in accounting. "Freddie Mac continues to fulfill its obligations to support the housing finance market, and provide liquidity and access to mortgage credit," Watt said.
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