Because of provisions made from bad loans, Freddie Mac, the second largest buyer of home mortgages has reported a second quarter profit loss of 45 percent. A year early for the three months ended June 30, the company had posted a profit of $1.4 billion or about $1.93 a share. However, this year they have only earned $764 million, or $1.02 a share.

Although profits were down, revenue rose 4.8 percent to $2.26 billion from $2.15 billion. Freddie Mac makes money from interest payment on mortgages it holds and earns fees from insuring mortgages sold to investors.

Freddie Mac had said that it recorded a $320 million provision for credit losses in the second quarter. This is a result in the problems the nation has been having with mortgages. These second quarter loses have missed Wall Street expectations. Thomson Financial was expecting profits of $1.16 a share on revenue of $1.69 billion for this quarter.

Shares of Freddie Mac fell $1.76 or 3 percent to $61.49 on Thrusday.

[via NYT]

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