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Freddie Mac reports 45 percent income drop

WASHINGTON, Aug. 30 (UPI) -- Freddie Mac, the home-mortgage financier, reported a 45 percent drop in second-quarter net income and a $320 million loss on new mortgages Thursday.

The company reported net income of $764 million, or $1.02 a share, compared with $1.4 billion, or $1.93 a share, a year earlier, The Wall Street Journal said. Total revenue rose 4.8 percent to $2.26 billion.

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The company's latest results come in the midst of broader struggles in the mortgage market -- particularly related to subprime loans.

It said the $320 million credit loss largely reflects credit deterioration on 2006 and 2007 loan originations caused by higher foreclosures and slowing home-price increases.

Freddie Mac returned to quarterly reporting in June for the first time since a massive 2003 accounting scandal forced it to restate $5 billion in earnings.

Freddie and rival Fannie Mae don't directly buy many loans considered subprime but do buy those packaged by others backed by subprime loans.

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