Freddie Mac: Good, bad, but no longer ugly

The good news that came out of the delayed report of Freddie Mac’s earnings in 2004 is that the fair value of it’s assets had increased by 13 percent last year.

The bad news was that net income of this second-largest mortgage-finance provider in the U.S. had declined by 42 percent.

Still, the federal office that supervises Freddie Mac confirmed that the company had adequate capital. The report was delayed because of an investigation into underreporting of its earnings in the years 2000 through 2002.

The results of the investigation led to restatements of earnings being issued, executives being dismissed, and major changes in Freddie Mac’s accounting and compliance procedures.

There was more good news for Freddie Mac on Thursday. The report of their decline in earnings last year didn’t scare off Wall Street investors. By midday on Thursday, Freddie Mac’s stock had risen by 75 cents a share.