Freddie Mac lost $2.5 billion in the third quarter and said it will be a "considerable time" before the housing market recovers.
Freddie Mac said the amount it set aside to cover credit losses tumbled by more than half, to $3.7 billion in the latest quarter from $8 billion a year earlier. The company said 3.8% of borrowers were 90 days or more late on payments at Sept. 30, down from 3.96% in June.
But that good news was tempered by the observation that more late borrowers are defaulting on their loans.
During the third quarter, the company continued to see slowdowns in new single-family delinquencies, a reduced volume of newly modified loans subject to individual impairment, and higher expected recoveries from mortgage insurers; however, those improvements were largely offset by worsening default probabilities.
The company's CEO, Charles Haldeman, was appropriately subdued in his commentary.
"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," Haldeman said. "We believe that it will be a considerable time until the housing market has a sustained recovery."
See the entire article here: Freddie Mac sees no housing recovery soon - Street Sweep: Fortune's Wall Street Blog
