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Freddie Mac to ask for billions more in government aid

The mortgage giant says it needs an additional $30 billion to $35 billion to cope with losses on home loans.

January 24, 2009|Associated Press

MCLEAN, VA. — Mortgage finance company Freddie Mac said Friday that it would need an additional $30 billion to $35 billion in government aid as it copes with losses on loans the company backed during the housing bubble.

The company disclosed in a Securities and Exchange Commission filing late Friday that it was expecting its government regulator, the Federal Housing Finance Agency, to make the request from the Treasury Department.

That comes on top of the $13.8 billion the company received last year after it was seized by the government. Sibling company Fannie Mae has yet to request any such aid but has warned that it might.

Federal regulators seized control of both companies in September after they faced mounting losses from the housing market's bust. An agreement with the Treasury Department allows the government to invest as much as $100 billion in each company.

The actual amount of the request will reflect the amount of losses the company sustained in the fourth quarter, Freddie Mac said in the filing. The request suggests that losses are continuing for Freddie Mac, which posted a loss of $25.3 billion for the third quarter.

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