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Freddie Mac has asked for a further US$13.8 billion (A$21.5 billion) US federal government lifeline after reporting a US$25.3 billion (A$39.4 billion) loss for the third quarter.
The latest loss dwarfs the US$1.2 billion ($A1.9 billion) the lender reported in the same quarter last year, highlighting the sharp deterioration in the US housing market over the last 12 months.
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Together with Fannie Mae, Freddie Mac accounts for more than half of all US loans.
The government conceded in September that a failure by Freddie Mac or Fannie Mae would be a catastrophe for both the US and international financial markets.
Europe’s biggest economy in recession
Germany is officially in recession after recording negative growth of 0.5 per cent in the September quarter. The contraction followed negative 0.4 per cent growth in the second quarter this year.
The Organisation for Economic Cooperation and Development (OECD) said the developed world was likely already in a recession, where it would remain into 2009.
US acts QUICKLY to ease spiralling foreclosures
HOPE NOW, a private sector alliance of US mortgage servicers, non-profit organisations, counsellors and investors, has announced a new initiative it claims will make it easier and quicker for most at-risk home owners to modify their mortgages and remain in their homes.
The “Streamlined Modification Plan” will be implemented by 15 December and apply to borrowers 90 days or more behind on repayments on loans owned by Freddie Mac, Fannie Mae or other participating lenders.
English rates slashed to lowest level in over 50 years
The Bank of England has slashed the official cash rate by 150 basis points in a bid to soften the impact of the “most serious disruption” to the global banking system in almost a century.
The reduction brings the British cash rate down to just three per cent – the lowest level since 1955.
