By Alan ZibelWASHINGTON -- Freddie Mac ( FRE) is asking for an initial injection of $13.8 billion in government aid after posting a massive quarterly loss. The mortgage finance company is making the first request to tap the $200 billion promised by the Treasury Department to keep it and sibling company Fannie Mae ( FNM) afloat after the two were seized by federal regulators more than two months ago. Freddie Mac said it expects to receive the money by Nov. 29. The McLean, Va.-based company posted a loss Friday of $25.3 billion, or $19.44 per share, for the third quarter. The results compare with a loss of $1.2 billion, or $2.07 a share, in the year-ago period. Analysts were looking for a loss of 89 cents per share for the latest quarter, according to Thomson Reuters. The loss was mainly due to a $14.3 billion charge to reduce the value of tax assets, but also was driven by $9.1 billion in writedowns on mortgage securities, and $6 billion in credit losses due to soaring mortgage delinquency rates and foreclosures. Freddie Mac said that rising unemployment rates, tightening credit and deteriorating economic conditions "contributed to a substantial increase in the number of delinquent loans," including prime loans made to borrowers with strong credit. "Continuing home price declines and growing unemployment are now affecting behavior by a broader segment of mortgage borrowers," the company said in a Securities and Exchange Commission filing. Freddie Mac's overall delinquency rate rose to 1.22%, from 0.9% at the end of June, and 0.5% a year earlier. The number of foreclosed properties that Freddie Mac holds rose to 28,000, from 22,000 in June. On Monday, Fannie Mae posted $29 billion loss in the third quarter as it took a massive tax-related charge. While Fannie Mae said it may have to tap the government's for help in the coming months, it has not yet done so. Fannie Mae and Freddie Mac, which own or guarantee around half of the $11.5 trillion in U.S. outstanding home loan debt, operate in a conservatorship that enables the government to inject up to $100 billion in each company in exchange for ownership stakes of almost 80%. They also are facing a federal grand jury investigation into their accounting practices. Both Fannie and Freddie have changed their accounting for their deferred-tax assets, which can emerge from operating losses, and can be used to reduce future tax expenses. Companies must be able to show they will be profitable if they intend to use the tax assets for earnings in later periods. Freddie Mac's net worth -- the value of its assets minus the value of its liabilities -- fell to negative $13.8 billion at the end of September, which forced the company to ask for government help.
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