Despite being pushed to do so, Freddie Mac, the second largest provider of home loans in the United States stated that they would not be seeking to raise new capital. Currently, Freddie Mac and Fannie Mae, their largest competitor are trading at the lowest levels in several years. Both companies offer fixed mortgages, but have been in the news lately for their variable rate products and their recent foreclosures.
“This company will bow to no one,” Chief Executive Officer Richard Syron said, responding to a question at a meeting with analysts today in New York. “It’s clear what our fiduciary responsibility is,” Syron said, referring to shareholders. “We have sufficient capital to continue to grow,” added Freddie Mac Chief Financial Officer Anthony Piszel. “There is no dilutive capital raise plan.”
Freddie Mac recently lost $2.45 billion in the fourth quarter of 2007, although their fixed mortgages were still performing well, if not a little low. However, they are not having the default problem on these loans, and are focusing on the trouble in the subprime mortgage arena. Despite their plans to avoid raising capital, Freddie Mac’s stock dropped an additional 12 points on Wednesday.
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