Freddie Mac cuts 116 area workers

Freddie Mac, a stockholder-owned corporation established by Congress to support homeownership and rental housing, is pulling out of the suburbs and laying off 116 workers.

The mortgage firm told employees that it intends to close its leased office at 1000 E. Woodfield Road, Schaumburg, by mid-June after two years.

Freddie Mac has another office in downtown Chicago, which will remain.

"We've been going through a restatement of our earnings and lost a lot during this mortgage crisis," said Freddie Mac spokeswoman Shawn Flaherty. "This is a reflection of the market."

The McLean, Va.,-based Freddie Mac reported in late February that it posted a net loss of $3.1 billion, compared to net income of $2.3 billion for 2006.

CEO Richard F. Syron said in a statement at that time that today's economy represents "one of the most severe housing downturns in American history."

Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances by issuing mortgage-related securities and debt instruments in the capital markets.

The firm has about 5,000 employees.

Affected workers are in the information technology department and will be receiving severance packages. Flaherty said that

"This was not an easy decision, but it's based on a reflection of the market," she said.