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Freddie Mac Reports Profit Drop Amid Losses on Derivatives

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Freddie Mac reported sharply lower profits for the fourth quarter and full year 2014, driven by a decline in the value of derivatives bought to hedge interest rates after accounting gains that had yielded record results.

The mortgage-finance company, which has been U.S.-owned since it was bailed out by taxpayers during the 2008 credit crisis, made $7.7 billion last year compared with $47.8 billion in 2013, according to a regulatory filing Thursday.