Freddie Mac, Banks | featured news

Freddie Mac reported a surprising profit in the second quarter, but the profit turned to a loss for shareholders after the company paid the U.S. government a $1.1 billion dividend.

The Obama administration launched a broad government effort this week to overhaul mortgage giants Fannie Mae and Freddie Mac and is considering splitting the companies and putting their troubled assets in a new federally backed corporation, administration officials said.

The FBI is looking into a report that Freddie Mac improperly deferred billions of dollars of losses incurred from 2001 through 2004.

The Freddie Mac executive who apparently committed suicide had asked to take time off from work to deal with job-related stress, a person familiar with the matter told Reuters on Thursday.

The company’s acting chief financial officer, David B. Kellermann, was found dead in his Virginia home, in an apparent suicide.

Fannie Mae is due to pay retention bonuses of as much $470,000 to $611,000 this year to some executives despite enormous losses. Freddie Mac also plans to pay such bonuses but hasn't yet provided details.

Freddie Mac, facing mounting damage from the U.S. housing crisis, said Wednesday it will ask the government for nearly $31 billion in additional aid after posting a gargantuan loss of more than $50 billion last year.

The resignation comes amid rising losses and unresolved questions about the mortgage giant's path. The government-appointed chief executive of McLean, Va.-based Freddie Mac said Monday that he was resigning from the mortgage-finance giant, less than six months into the job.

The $700 billion financial-sector bailout is likely to rely on a broad range of tools, from injecting additional capital into banks and helping homeowners avoid foreclosure to expanding the roles of the Fed, Fannie Mae, Freddie Mac and the FDIC.