January 24, 2009

Freddie Mac to tap $35B in bailout funds

U.S. mortgage giant Freddie Mac will ask for up to $35 billion in additional federal bailout dollars, company officials have revealed.

The help needed to stabilize Freddie Mac and its sister firm Fannie Mae looks to be greater than originally thought when they were taken over by the U.S. government, analysts told Saturday's Washington Post.

The government has pledged more than $100 billion each for Fannie Mae and Freddie Mac, and Freddie has already drawn $14 billion in government funds. With the newest $35 billion, roughly half of the funds the government has pledged to keep Freddie Mac on firm financial footing will have been tapped.

Fannie Mae on Friday began laying off several hundred employees in the Washington area, the Post said. That represents a shift in Fannie's emphasis from mortgage bundling and trading activity, which had been based in Washington, to foreclosure-prevention efforts based in Dallas, the newspaper said.