Freddie Mac to Hank Paulson: $14 Billion Please…

With all this talk about TARP spending, it’s easy to forget about the billions of dollars the government is on the hook for after its decision to seize America’s troubled mortgage-finance behemoths.

Freddie Mac--one half of the government sponsored enterprise duo that was put under conservatorship in September--is hitting up Hank Paulson for nearly $14 billion after a steep third-quarter loss put its net worth into negative territory.

The $25 billion loss was tied to the deteriorating housing market and tax-asset writedowns.

Under the terms of Freddie’s agreement with the Feds, the housing finance giant can get funds--up to $100 billion--from Treasury if its regulator determines that its liabilities exceed its assets, which--thanks to the huge loss--is now the case. (Freddie’s net worth is now roughly negative $14 billion.)

From the release:

Freddie Mac (NYSE:FRE) today reported a net loss of $25.3 billion, or $19.44 per diluted common share, for the quarter ended September 30, 2008, compared to a net loss of $1.2 billion, or $2.07 per diluted common share, for the quarter ended September 30, 2007.

As a result of the net loss, at September 30, 2008, the company’s stockholders’ equity (deficit) totaled $(13.8) billion. Pursuant to the company’s Senior Preferred Stock Purchase Agreement (Purchase Agreement) with the U.S. Department of the Treasury (Treasury), the Director of the Federal Housing Finance Agency (FHFA) has submitted a request to Treasury under the Purchase Agreement in the amount of $13.8 billion. The Purchase Agreement is discussed below under “Purchase Agreement.”

And that’s not all. Fannie Mae is facing similar pressures. From Bloomberg News:

Fannie said this week it may need more than the $100 billion in funding pledged by the Treasury to stay afloat.

“This commitment may not be sufficient to keep us in solvent condition or from being placed into receivership,'' if there are further ``substantial'' losses or if the company is unable to sell unsecured debt, Fannie said in a Nov. 10 filing with the U.S. Securities and Exchange Commission.