Record Loss Forces Freddie Mac to Tap $100 Billion Fund - Financials * US * News * Story - CNBC.com: "Freddie Mac reported a $25.3 billion quarterly loss on Friday as the housing slump worsened, forcing the second-largest provider of U.S. home loan funding to draw on a $100 billion Treasury Department lifeline.
The company attributed much of the record loss to a write down of tax-related assets, essentially conceding it will not return to profitability soon. Writing down the assets left the company with a negative net worth, in which liabilities exceed its assets, requiring it to tap the Treasury backstop.
Freddie Mac said after tentative signs that the housing market was stabilizing in the second quarter, conditions worsened 'dramatically' during July through September.
'The percentage decline in home prices was particularly large in California, Florida, Arizona and Nevada, where Freddie Mac has significant concentrations of mortgage loans,' the company said in a securities filing. Freddie Mac said the rising unemployment rate was the main culprit for the worsening housing market."
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Let's see...California, Florida, Arizona, and Nevada. What do those four states have in common?
Oh, yes. Almost all their new housing is in CIDs. Does this mean that the prices have fallen more for CID housing than for new conventional neighborhoods?
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