WASHINGTON (Reuters) - Freddie Mac FMCC.OB requested $146 million from the U.S. Treasury in order help make interest payments on government loans used to keep the mortgage buyer afloat, the company said Friday.
Although Freddie Mac reported $619 million in net income in the fourth quarter of 2011 as well as other income of $887 million, it was not enough to make the $1.7 billion interest payment it was required to make to the government.
Freddie Mac and sister company Fannie Mae FNMA.OB were seized by the government at the height of the financial crisis and placed under conservatorship. Since then, Freddie Mac has had to seek $72.3 billion in federal aid in order to stay solvent.
As required under the terms of the takeover, Freddie must make 10 percent dividend payments on the government loans every quarter, similar to how credit card borrowers must make minimum monthly repayments. So far, it has paid about $16.5 billion in cash dividends to the Treasury.
Freddie Mac’s Chief Executive Charles Haldeman, who is planning to step down as CEO in October, said the company cut about $180 million in expenses over the last two years as part of an effort to “protect” taxpayers’ aid.
Freddie Mac and Fannie Mae, which provides funding for home loans, have soaked up about $170 billion in taxpayers’ money since the companies were taken over.
Last week, Fannie Mae said it would seek $4.6 billion in government funds due to losses related to its legacy portfolio of bad loans.
Reporting By Rachelle Younglai; editing by Jeffrey Benkoe