Freddie Mac asks for first government injection of $14 billion

US mortgage giant Freddie Mac reported losses of $25 billion for the period between July and September this year and have now asked the US Federal government for the first $14 billion handout that was made available from the Feds bailout plan.

It just raises more concerns that the government’s interception was not enough and it will take a lot more money to prop up both Freddie Mac and its sister company Fannie Mae.

With Freddie Mac’s liabilities being more than $13.8 billion it is basically broke and some analysts predict that the government may have to pay up to $200 billion to save the two ailing banks.

The Treasury will have to inject money every quarter into Freddie or Fannie if either company’s liabilities exceed their assets or up to $100 billion for each firm, this comes under the government agreement.

Source: washingtonpost