Freddie Mac Sheds Red Ink
WASHINGTON – Secondary mortgage market giant Freddie Mac posted its first net profit in almost two years, earning $676 million in the first quarter – even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns, the company reported yesterday.
Freddie reported that its total earnings (before dividends) came to a stunning $2.7 billion in the quarter, one of its best ever.
Not only did it earn money but its net worth now stands at $1.2 billion. As a result, no additional funding from Treasury was required for the first quarter of 2011.
The company also reported total comprehensive income of $2.7 billion in the first quarter of 2011, compared to total comprehensive income of $1.2 billion in the fourth quarter of 2010.
Freddie reported that the serious delinquency rate on its single-family loans fell to 3.63% at March 31, compared to 3.84% at year-end.
The strong showing comes as elected officials in Congress continue to weigh options on how to dismantle the company and its sister firm, Fannie Mae. Both were placed into conservatorship in September 2008.
In the fourth quarter of 2010, Freddie posted a meager $113 million net loss but earned $1.2 billion before paying a dividend to Treasury.