Freddie Mac, the failed  American home loans giant, has asked for $13.8 billion in exigency funds after third quarter losses rose amidst worsening markets and the housing slump. The company said it expects to receive the money by 29 November.

The third-quarter net loss increased to $25.3 billion, or $19.44 a share, compared with a loss of $1.2 billion, or $2.07 a share, in the same period last year, forcing Freddie to seek government funds.

Freddie Mac was the first financial institution to get federal funding after the government's decision to give up the plan to buy the troubled mortgage-related assets from banks and other financial firms.

The Federal Housing Finance Agency took control of Virginia-based Freddie and the larger Washington-based Fannie Mae (the two organisations are responsible for 40 per cent of America's mortgages) after finding their capital too low, pledging investment of up to $100 billion as required by each company to stay afloat.

Whether or not the US government takes a stake in Freddie Mac in return for the funding remains to be seen.

Freddie Mac increased write-downs for bad mortgages to $9.1 billion, and $6 billion in credit losses due to high mortgage dereliction rates, and took a $14.3 billion charge against most of its deferred tax credits.

Fanni Mae, which announced a record $29 billion loss in the third quarter, said it may be forced to look for help in the face of deteriorating trading.

Freddie Mac's net worth - the value of its assets minus the value of its liabilities - is now a negative 13.8 billion.