As their plunging shares raised questions of solvency, the federal government recently offered a lifeline that could cost 25 billion dollars over the 2009-2010 fiscal period, according to the Congressional Budget Office. The two GSEs have been under pressure since the housing market collapsed in early 2006 after several boom years of easy credit and speculation that fed off the American dream of home ownership. Freddie Mac and Fannie Mae, both government-sponsored enterprises (GSEs), underpin some five trillion dollars in mortgages, roughly half of the US market. The government-chartered, shareholder-owned firm said the financial results were severely impacted by a 2.5 billion dollar charge for credit losses from rising delinquencies, foreclosures and falling home prices. Freddie Mac said it had a second-quarter net loss of 821 million dollars, with the loss per share at 1.63 dollars, more than triple most analysts' forecasts of 53 cents per share. Troubled mortgage finance giant Freddie Mac on Wednesday reported a market-shocking loss in the second quarter as the US housing slump deepened and slashed its dividend at least 80 percent.
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