Mortgage write-downs not over, some say

WASHINGTON, July 8 (UPI) -- Two critical players in U.S. mortgage financing have stumbled badly since the first of the year, a signal that huge write-downs aren't over, analysts said.

The government-backed Federal Home Loan Mortgage Corp.'s stock value dropped 18 percent in one day, while the Federal National Mortgage Association dropped 16 percent, The Washington Post reported.

Federal Reserve Bank Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson Jr. have urged both Freddie Mac and Fannie Mae to raise capital, but the climb to improved liquidity has gotten steeper recently, the Post reported.

In May, Freddie Mac said it would sell $2.75 billion in common stock to raise capital. But, Freddie Mac's share values have fallen 56 percent since the announcement was made, the Post reported.

"Across the board, there are probably more write-downs to come," fund manager Florian Esterer at Swisscanto Asset Management told the newspaper.

Some estimate mortgage write-downs since 2007 total more than $400 billion but that could rise to $945 billion this year, the International Monetary Fund has said.