WASHINGTON — Government-controlled mortgage buyer Freddie Mac managed a narrower loss of $4.1 billion for the third quarter and asked for $100 million more in federal aid — far less than the $1.8 billion it sought in the second quarter.
But while the slimmer loss and recent glimmers such as a slowing rate of new soured loans coming onto Freddie’s books may be positive signs, they don’t mean the end of the company’s travails, experts say.
“The fact that losses are better is good. But it’s not necessarily a forecast for future earnings growth,” said Anthony Sanders, a professor of real-estate finance at George Mason University in Fairfax, Va. “The problem still remains that we are faced with a deteriorating housing market.”
Sanders expects losses to increase for Freddie Mac and sibling company Fannie Mae in the future.
“This is a lull in the storm,” he said.
And certainly, the results won’t silence the mortgage giants’ many critics — especially among Republican lawmakers whose party gained control of the House in Tuesday’s midterm elections. Freddie Mac reported its earnings a day after the elections.
Over the next year, lawmakers plan to review the nation’s mortgage-lending system and consider a potential replacement for Fannie Mae and Freddie Mac.
