Freddie Mac posts 5 bn loss

Including a 1.3 billion dividend payment on senior preferred stock bought by the Treasury in previous quarters,Freddie Mac8217;s third-quarter loss increases to 6.3 billion.

The home funding company8217;s loss comes amid a rise in provisions for credit losses to 7.6 billion in the quarter,up 46 percent compared with the previous quarter,as delinquencies worsened on loans it guarantees. Provisions will remain high this quarter,it added.

8220;I would say we are just beginning to see the impact of the chargeoffs on their guarantee book,8221; said Janaki Rao,vice president of mortgage research at Morgan Stanley in New York.

Its larger rival Fannie Mae on Thursday said it would need 15 billion from the U.S. Treasury after a whopping 18.9 billion third-quarter loss.

Results at Freddie Mac and Fannie Mae are widely watched as a barometer of the U.S. housing market since they own or back nearly half of outstanding mortgages.

The losses have presented a dilemma to Congress as it wants to protect taxpayers8217; money but is also counting on the companies to undertake foreclosure prevention efforts which are significantly adding to expenses.