Freddie Mac Chief: Housing slump will get even worse, Freddie Fannie may need $363 billion

11/3, BBC: "Freddie Mac in more losses as head predicts new slump"

"US mortgage agency Freddie Mac has suffered a further $4.1bn (£2.5bn) loss on bad home loans in the past q

• Meanwhile its head predicted "renewed pressure" on the US housing market.

"We believe it will be a considerable time before the housing market has a sustained recovery," said chief executive Charles Haldeman.

• The federal regulator that now oversees the agency recently raised forecast total losses at Freddie and failed sister-company Fannie Mae
  
• to $259bn.

Mr Haldeman added: "As we near the end of 2010, the housing market remains fragile, and has recently come under renewed pressure from slowing economic growth, weaker employment and foreclosure uncertainties."

• Recent house price figures revealed widespread falls set in again in August, following the expiry in April of a tax credit for homebuyers.

Freddie's latest loss, for the three months to September, is lower than the $6.7bn the company lost in the same period a year earlier, and came as no surprise to markets.

• Freddie asked the US federal government to make a further $100m of capital available - a much lower figure than in previous such requests.

During the 2008 financial crisis, Washington put Freddie Mac and Fannie Mae into "conservatorship" -

• a quasi-nationalised status in which the federal government
  
• promised to maintain their solvency by injecting new equity on demand.

The US government has already committed $148bn in capital injections to Freddie and Fannie.

However, because of continuing loan losses, that figure may increase to between $221bn-

• $363bn, according to the Federal Housing Finance Agency."

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