Early Briefing: Freddie's Loss and Waxman's Letter
*Freddie Mac said its losses from foreclosures and other failed home loans nearly doubled in the second quarter, and it predicted that home prices would fall more than it previously projected, compounding its woes. Freddie said its expenses from foreclosures and related problems rose to $2.8 billion in the quarter ended June 30 from $1.4 billion in the previous three months.
From the end of March to the end of June, the company more than doubled its reserves for anticipated losses to reflect continuing increases in mortgage delinquencies and the rising cost of disposing of foreclosed property.
Overall, the McLean company lost $821 million ($1.63 per share) in the second quarter, compared with a loss of $151 million (66 cents) in the quarter that ended March 31. For the second quarter of 2007, Freddie Mac reported a profit of $729 million.
*Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, has asked Freddie and Fannie Mae whether they know of any White House involvement in the recent decline in their share prices. In a letter dated Aug. 1, Waxman told Freddie Mac CEO Richard F. Syron that he was "evaluating" whether to "open an investigation into the circumstances that precipitated the recent distress in the shares prices of Freddie Mac."
*AOL's expensive investment in building a leading online advertising network is not yet paying off for parent company Time Warner. Time Warner, one of the largest media companies in the world, said second-quarter profit slid 26 percent, to $792 million (22 cents per share). The main reason was declines at AOL, which has major operations in Dulles. Ad sales at the Internet company inched up 2 percent in the quarter ending June 30.
*The Maryland Board of Public Works approved a $44 million contract to extend shuttle service at Baltimore-Washington International Thurgood Marshall Airport, despite complaints that the service operator had failed to meet state goals for minority participation. The three-year contract to First Transit was approved 2 to 1 at the close of a third contentious hearing on the issue. Comptroller Peter Franchot (D) cast the dissenting vote, with Gov. Martin O'Malley (D) and Treasurer Nancy K. Kopp (D) in favor.
August 7, 2008; 5:00 AM ET
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