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 WASHINGTON (AP) - Rising foreclosures slightly dented the quality of Freddie Mac's holdings last year, the mortgage finance giant said Friday as it reported a slight increase in profit to $2.2 billion. Freddie Mac's chief executive foresees some degree of economic contagion in the future from the turmoil in the high-risk mortgage market.
The government-sponsored company, emerging from an accounting scandal, also said it lost $480 million in the fourth quarter as a result of moves in interest rates that hurt its business of guaranteeing home loans.
The loss at Freddie Mac, which is the second-largest buyer and guarantor of home mortgages in the country, compared to profit of $684 million in the October-December period of 2005.
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