By James Tyson
Aug. 30 (Bloomberg) -- Freddie Mac, the second-biggest U.S. mortgage finance company, reported second-quarter profit fell 45 percent after setting aside $320 million for losses from the worst housing slump in 16 years.
Net income declined to $764 million, or $1.02 a share, from $1.4 billion, or $1.93, a year earlier, McLean, Virginia-based Freddie Mac said today in a statement. Revenue dropped 4.8 percent to $2.26 billion.
The government-chartered company, with a mortgage portfolio of $720.6 billion, is ``seeing weakening'' in the home-loan market, Chief Executive Officer Richard Syron said in the statement. Subprime mortgage defaults rose to 10-year highs, spreading to higher-quality loans and weighing on housing prices.
"A lot of people's attention will next go to how they manage credit expenses because the time from delinquency to default is compressing,'' said Jim Vogel, head of agency debt research at FTN Financial in Memphis, Tennessee.
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