Giant US lender Freddie Mac is still having home loan problems and many are wondering just how long the lender can go on bleeding cash. Although the home loan company has received help from the federal government, it does appear as though they are dealing with more defaults on home loans and their subprime division is quickly eating away at their other profitable ventures, creating a much larger problem.
“We discount Freddie’s presentation . . . about how it can stay above regulatory-capital minimums come hell or high water,” the consulting and research firm Federal Financial Analytics said in a report to clients. “Any number of assumptions in it are questionable,” the firm said, adding that it was “a near-certainty” that Freddie Mac will ultimately become undercapitalized.
“We’ve obviously provided you with an extraordinary amount of information, but I’m not going to apologize for that,” chairman and chief executive Richard F. Syron said in an Aug. 6 conference call with investors and analysts. The aim, Syron said, was to provide “as much information as you could possibly need . . . to come to your own best view of what the future may hold.”
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