Freddie Mac released its second quarter 2008 financial statements on Wednesday revealing some staggering losses.

The nation's second largest mortgage company said that losses in the second quarter totaled $821 million or $1.63 per share compared with a profit of $729 million in the second quarter of 2007.

This was the fourth consecutive quarter in which Freddie Mac has lost money. In the first quarter of this year the companies tallied losses of $151 million or 66 cents per share.

The losses were much higher than the average of 41 centers per share anticipated by analysts who follow the stock.

In response to the losses the government sponsored enterprise (GSE) said it would cut its quarterly dividend by 80 percent to a nickel a share (from $.25) and said it would raise at least $5.5 billion from investors to shore up its balance sheet. The companies share price has lost 80 percent over the last year so the cost of raising the money will be steep. The company may also slow purchases of mortgages into its credit guarantee portfolio.

The value of Freddie Mac's assets was a negative $5.6 billion at the end of the second quarter from a negative value of $5.2 billion in the first quarter.

Richard F. Syron, chairman and CEO of Freddie Mac said, in a statement on the corporations website "Freddie Mac was created to ensure the continued flow of funds to America's homebuyers, and we are pleased to be fulfilling that important mission. At a time of severe stress in the housing and credit markets, we are successfully providing critical liquidity and stability.

"While we expect continued housing and economic weakness will affect our overall performance this year, we continue to maintain a surplus over all regulatory capital requirements. We remain committed to raising $5.5 billion of new capital and will evaluate raising capital beyond this amount depending on our needs and as market conditions mandate. We are confident the actions we are taking are strengthening Freddie Mac's financial and competitive position as well as its ability to serve the American homebuyer and will generate value well into the future," concluded Syron.

The company further stated that the recently enacted Federal Housing Finance Regulatory Reform Act of 2008, or the Regulatory Reform Act, establishes a new regulator for Freddie Mac, the Federal Housing Finance Agency (FHFA), with enhanced regulatory authorities relating, among other things, to the company's minimum and risk-based capital levels and business activities including portfolio investments, new products, management and operations standards, affordable housing goals and executive compensation. The Regulatory Reform Act expands the circumstances under which the company could be placed into conservatorship and also authorizes FHFA to place the company into receivership under specified circumstances. The Regulatory Reform Act also requires the company to allocate or transfer certain amounts to (i) the Secretary of Housing and Urban Development to fund a Housing Trust Fund and (ii) a Capital Magnet Fund administered by the Secretary of the Treasury. In addition, the Regulatory Reform Act provides the Secretary of the Treasury with temporary authority, until December 31, 2009, to purchase any obligations and other securities the company issues under certain circumstances.

Given the recent enactment of this Act and the fact that FHFA has considerable discretion in implementing its provisions, including through rulemaking proceedings and the issuance of orders, the said it could not predict the impacts that the Act and FHFA's exercise of its authority under the Act will have on Freddie Mac's business, financial position or results of operations. However, to the extent the Act or regulations or orders issued by FHFA pursuant to the Act may, for example, increase the company's capital requirements, limit its portfolio and new product activities, increase its affordable housing goals, or limit its ability to attract and retain senior executives, the company anticipates that the impact could be materially adverse.