WASHINGTON Fannie Mae reported a second quarter profit of $10.1 billion, double last year’s second quarter earnings, almost all of which will go to pay down its taxpayer bailout assistance.
The secondary mortgage market giant said it will make a $10.2-billion payment to the U.S. Treasury next month, making more than $105 billion repaid of the total $117 billion in taxpayer assistance it has received since its September 2008 takeover by the federal government.
Yesterday’s announcement came a day after Freddie Mac reported a $5 billion second quarter profit, $4.4 billion of which will go to pay down its taxpayer bailout. Freddie already has repaid $37 billion of the $70 billion it received in government assistance, marking one of the most successful taxpayer bailouts of all time.
The second quarter profit was Fannie’s sixth in a row, mirroring the housing market’s bounce back from the 2007-2009 crash. Fannie said it expects to begin paying taxes again soon and “will remain profitable for the foreseeable future.”
Higher home prices during the quarter let Fannie Mae reduce its losses for loan reserves by $5.4 billion. Fannie had set aside more than $126 billion for such losses between 2009 and 2011. It retains a $53.1 billion reserve for future loan losses.
The improved financial condition of the two mortgage giants comes as Congress is debating proposals to wind the two companies down and privatize most of their secondary market roles.
