Freddie Mac taps Treasury for $6 billion as losses mount

Troubled housing giant Freddie Mac is tapping the Treasury Department for another $6 billion, after posting a $4.4 billion loss in the third quarter of the year.

The government-sponsored enterprise (GSE) announced its bleak financials Thursday, saying the slowing economic recovery continues to weigh on the housing market, which in turn is making things tough for Freddie's financials.

“The weak labor market and fragile economy continue to weigh heavily on the single-family market, causing many potential buyers to sit on the sidelines or opt to rent despite high affordability and record low mortgage rates,” said Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr.  “Looking ahead, we expect the tepid recovery to continue to put downward pressure on house prices into early next year."

While the ailing housing market drove Freddie's losses into the  billions, Haldeman did tout the GSE's ability to help existing homeowners take advantage of hitsorically low mortgage rates, avoid foreclosures, and its role as a "stabilizing force" in that market.

However, those boosted refinancings are actually putting pressure on Freddie's books, and those homeowner savings means lower mortgage payments going towards its finances. Haldeman said borrowers that have been able to refinance are saving on average $2,500 in interest payments over the next year.

Taxpayers have been on the hook for Freddie and its fellow GSE, Fannie Mae, since September 2008, when the federal government placed them under conservatorship. While both parties generally agreed that the GSEs' role needs to be greatly diminished or eliminated in a remade housing finance market, no clear way forward has emerged just yet. A few measures winding down Fannie and Freddie while enticing private investment to return to the market have been offered by House Republicans, and the White House laid out a series of options to remake the housing market at the beginning of the year.

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