McLEAN, Va. ( TheStreet) -- Despite Freddie Mac's ( FMCC.OB) continued losses and request for an additional $100 million from U.S. taxpayers, there were some bright spots in its quarterly report on Wednesday.

But those who were counting on continued improvement in delinquency rates or credit costs might have been sobered by a disheartening prediction from CEO Ed Haldeman - that it "will be a considerable time" before the housing market fully recovers.

During the September period, Freddie Mac lost $2.5 billion. The net loss attributable to common shareholders was $4.1 billion, or $1.25 per share, compared to a net loss of $6 billion, or $1.85 per share, the previous quarter.

Still, the housing-finance giant reported the lowest provision for credit losses in more than two years, as net charge-offs appeared to be topping out last quarter. Rates of seriously delinquent mortgages declined across its entire portfolio - most sharply in subprime loans, but also in prime. Its overall delinquency rate stood at 3.96% at Sept. 30, the first decline in over three years.

Credit problems made up the bulk of Freddie's losses, but simple interest income would have been able to offset those costs. The housing-finance giant was pushed into the red instead by losses on derivatives as interest rates flattened out and write-downs on non-agency subprime securities. Freddie requested $100 million from the Treasury Department to keep its net worth in the black, partly because of a $1.6 billion dividend payment it owed the Treasury Department.

In a nod to its ongoing status as, effectively, a ward of the state, Haldeman spoke more about the company's efforts to help troubled borrowers and encourage a housing recovery than about Freddie's fundamentals. (With a share price of a few dimes, a market cap below $250 million and the American public representing the largest stakeholder, it's hard to blame him.)

Haldeman noted that the company has worked to prevent foreclosures and "protect the integrity" of the process when there's no other option. He also said that most of Freddie Mac's credit problems pertain to bubble-era loans issued in 2005 to 2008, before the government took over Freddie and its sister company, Fannie Mae ( FNMA.OB). Indeed, delinquency rates of loans in Freddie's portfolio that were issued in 2009 and 2010 stand nearly at zero.

But Haldeman's most significant comment pertained to the long-awaited housing recovery.

"As we near the end of 2010, the housing market remains fragile, and has recently come under renewed pressure from slowing economic growth, weaker employment and foreclosure uncertainties," Haldeman said. "We believe that it will be a considerable time until the housing market has a sustained recovery."

-- Written by Lauren Tara LaCapra in New York.

>To contact the writer of this article, click here: Lauren Tara LaCapra.

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