Freddie Mac's net interest income and management and guaranteeincome of $2.7 billion were swamped by its non-interest losses of$12.1 billion, the bulk of which were a $9.1-billion impairment ofits securities. It also took a hit from $6 billion in credit lossesand a $1.1 billion loss on loans to Lehman Bros.


This report, coupled with Fannie Mae's $29-billion quarterlyloss, reported on Monday, are raising questions as whether theterms of the conservatorship are working for the GSEs. There havebeen calls for a loosening of terms--much like the way AIG's bailout wasrestructured. Equally loud, though, are those voices calling forreanalysis of the GSEs' role in mortgage finance and whether it isworthwhile to salvage their operations.


For more on the bailout, check out:
Real Estate Forum's:
"Can $700 Billion Unclog the CreditSpigot?"

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