The loss contrasts with a net gain of $2 billion the company reported for the same period in 2006, reported Reuters.

The company reported a net share loss of 46 cents in the first quarter. Excluding unusual items, Freddie Mac was expected to show a profit of $1.09 per share in the first quarter, according to Reuters Estimates.

With this report, Freddie Mac returns to timely quarterly financial reporting for the first time since its 2003 accounting scandal, which led to a $5 billion restatement of past earnings, reported Reuters.

According to Reuters, the company said mark-to-market losses tied to the wider credit spreads on the mortgages' assets in its portfolio was the main driver of the first-quarter loss.

Freddie Mac also said its fair value, before capital transactions, fell by about $300 million because of the credit spread widening, reported Reuters.
-New York State Society of Certified Public Accountants