Freddie Mac seeks $14 billion bailout

WASHINGTON, Nov. 14 (UPI) -- The Federal Home Loan Mortgage Co. said it had requested $14 billion in federal aid after posting third-quarter losses of $25.3 billion.

The government took control of Freddie Mac in September with a deal that included the promise of cash injections of up to $100 billion should the company's assets fall behind their liabilities, The Washington Post reported Friday.

The same deal was made with the Federal National Mortgage Association -- Fannie Mae -- which reported a $29 billion quarterly loss earlier this week, a figure that did not trigger a request for capital, the Post reported.

Freddie Mac's report, however, says the company's liabilities are $13.8 percent higher than its assets.

Freddie Mac cited, "the dramatic deterioration in market conditions ... declining home prices, increasing unemployment, a significant decline in consumer spending and a considerable tightening of both consumer and business credit," as contributing factors.

Before the report was released, economists had forecast continuing problems.

"Fannie Mae and Freddie Mac are completely exposed to the housing market," said Howard Shapiro, an analyst at Fox-Pitt Shelton. "Until home values stabilize and delinquency trends stabilize, we're going to continue to have this discussion."