Freddie Mac Seeks Capital

Freddie Mac's stocks fell 25% when it reported that it is seeking new capital after losing $2 Billion in the third quarter. It may have to cut half of its dividend in the fourth quarter. Investor anxiety has risen from the reports.

They plan to tighten standards and raise prices to manage the situation. They are under government restriction and must make policy change in order to maintain that standard. Their core capital was $600 million above the 30% mandatory target capital surplus.

"Without doubt, 2007 has been an extremely difficult year for the country's housing and credit markets and, as our third-quarter financial results reflect, we have been impacted by the deterioration in these markets," company Chairman and CEO Richard Syron said in a statement. "We recognized the challenges facing the mortgage markets, however, and have taken further steps to address them."