Freddie Mac seeks more funds
WASHINGTON – Government-controlled Freddie Mac requested $1.5 billion in additional federal aid Monday after posting a loss this spring. The mortgage giant also said Standard & Poor’s decision to lower its debt rating will cause “major disruptions” in the home-lending market.
Freddie Mac said it lost $4.7 billion, or $1.44 cents per share, in the April-June quarter. It compares with a loss of $6 billion, or $1.85 per share, during the same quarter in 2010.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a government regulator has controlled their financial decisions.
Fannie and Freddie own or guarantee about half of all U.S. mortgages and nearly all new mortgage loans. The mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.
Taxpayers have spent roughly $150 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates the final cost for rescuing the firms could go as high as $259 billion.
Verizon managers replace workers
NEW YORK – Thousands of Verizon landline workers took to picket lines Monday from Massachusetts to Virginia, fighting management demands for contract givebacks and disputing that their work is unprofitable.
Verizon Communication Inc. countered that its 45,000 unionized workers in the East should not expect the kind of compensation they were paid when the phone company was a monopoly.
The company used managers to replace workers Monday.
Union spokeswoman Candice Johnson and company spokesman Richard Young said management and labor met on Monday in New York. They had no word on progress.
Verizon Wireless, the non-union and more-profitable division of which Verizon owns 55 percent, was not affected by the strike.
Airlines rolling back ticket prices
DALLAS – U.S. airlines have started rolling back last month’s fare increases, so passengers are likely to pay the same prices even though federal ticket taxes are being collected again.
Southwest Airlines Co., its AirTran Airways subsidiary and Delta Air Lines Inc. said they cut fares back to where they were before July 23, when the taxes expired.
Most U.S. airlines raised fares last month after a standoff in Congress on funding for the Federal Aviation Administration caused federal excise taxes on tickets to expire. In effect, the airlines grabbed the money that previously went to the government instead of passing the tax break to consumers. By raising fares to offset the expired taxes, airlines were able to pocket an estimated $400 million in just two weeks.