Freddie Mac, the US mortgage giant, today announced its fourth successive loss and plans to cut its dividend after growing numbers of homeowners fail to make loan repayments.

The company which, along with Fannie Mae guarantee about $5 trillion (£2.5 trillion), or nearly half of all US mortgages, reported a $821 million loss compared to a $729 million profit in the second quarter of last year.

The losses were worse than analysts had expected after credit related expenses doubled to $2.8 billion and the company wrote off £1 billion on the value of sub-prime mortgages.

Freddie Mac also reaffirmed its intention to raise $5.5 billion in additional capital but provided no immediate details of how it would do so.

Richard Syron, chief executive at Freddie Mac, said: “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.”

Freddie Mac will cut its quarterly dividend by 80 per cent from 25 cents a share to 5 cents a share.

The company, which has projected credit losses of $2.2 billion for this year, said revenue rose by more than 10 per cent from the first quarter to $1.69 billion, including a increase of 92 per cent in net interest income to $1.5 billion.

The companies have faced a wave of share selling as investors speculated that the companies would fall short of the capital needed to offset losses sustained from delinquent mortgages.

The turmoil led Henry Paulson, the US Treasury Secretary, to arrange emergency measures that bolstered government backing for the companies.

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