By Dawn Kopecki
Feb. 24 (Bloomberg) Fannie Mae and Freddie Mac, the mortgage-finance companies under government control, are reporting fourth-quarter losses after writing down the value of tax credits and setting aside money for housing-market losses.
Freddie Mac posted a $6.5 billion net loss as it marked down $3.4 billion in low-income housing tax credits that the U.S. Treasury Department barred the McLean, Virginia-based company from selling, according to a filing today. Fannie Mae, which plans to report official results this week, said it’s taking a $5 billion charge for the same reason.
Capping a “trying and turbulent year” with $7.1 billion in credit losses and foreclosure-related expenses, as well as $5.2 billion in annual dividends owed to the Treasury for emergency aid, Freddie Mac said there can be “no assurances regarding when, or if, we will return to profitability.” Regulators seized the company, along with Fannie Mae, in 2008 as mortgage delinquencies rose.
“We start 2010 with some early signs of stabilization in the housing market, with house prices and home sales likely nearing the bottom sometime in 2010,” Freddie Mac Chief Executive Officer Charles Haldeman said in a statement. “Still, the housing recovery remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures.”
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