WASHINGTON Fannie Mae, riding the crest of the mortgage market recovery, reported a $58.7 billion first quarter net this morning, much of it from a one-time accounting move that allowed the company to lower its tax liability.
The secondary mortgage market giant, under government conservatorship since September 2008, reported earning $8.1 billion in the first quarter before taxes, mostly because of a better housing market.
Fannie also reported that $50.6 billion of its first-quarter net income came in part from losses on delinquent mortgages incurred during the housing crisis that Fannie wrote off against its 2013 taxes. That helped reduce what the company owed in taxes, and boosted its profit.
The first-quarter gain compares with net income of $2.7 billion in the first quarter of 2012. Fannie has now had five straight profitable quarters.
The report of Fannie’s record first quarter comes a day after Freddie Mac reported record earnings of $4.6 billion, clear signs of an improving mortgage market, while also muddying the congressional debate over the future of the two government-sponsored enterprises.
The two companies said a better housing market means fewer delinquent loans on their books. The improvement also has allowed the companies to charge mortgage lenders higher fees to guarantee the loans.
Fannie Mae said it will pay a dividend of $59.4 billion to the U.S. Treasury next month and requested no additional aid from the government. After the latest dividend, Fannie will have repaid $95 billion of the $116 billion bailout it received.
Fannie earned $17.2 billion in 2012 and says it expects to stay profitable for "the foreseeable future."
