Freddie CEO: Subprime Losses Mounting

Freddie Mac'sFRE CEO said the government-sponsored mortgage buyer will lose as much as $7.5 billion in the next few years, amid a prolonged housing slump and rising foreclosures.

Richard Syron, chairman and CEO of the second-biggest purchaser of mortgages behind sister company Fannie MaeFNM, said the company could lose between $5.5 billion and $7.5 billion in the next few years, according to published reports.

"I honestly think it's going to get tougher before it gets better," he said at an investor conference sponsored by Goldman Sachs, according to the Associated Press.

While the mortgage crisis has brought a rising wave of foreclosure notices into public view, less evident have been "pictures of people standing with furniture on the lawn," after being forcibly evicted from their homes, Syron said, according to the AP. "As that begins to happen, and it will happen, I am afraid of the impact that this has."

Freddie posted a $2 billion net loss for the third quarter as a result of the increased cash the company needed to set aside for rising credit losses, as well as a markdown in the value of its assets. Fannie Mae also posted losses for the third quarter.

Syron's comments came just hours before the Federal Reserve cut the federal funds rate a quarter-point to 4.25% on Tuesday afternoon; the Fed announcement sent stocks tumbling.