Freddie Mac will pay $4.4 billion to the Treasury Department after continued housing-market improvements allowed the company to post a seventh consecutive profitable quarter.

The McLean, Virginia-based company, which has operated under federal conservatorship since it was seized in 2008, had net income of $5 billion for the three-month period that ended June 30, according to a statement released today.

"We continued to observe improvement in the housing market, which contributed positively to our financial results," the company said in the statement, which was part of its Securities and Exchange Commission filing.

Freddie Mac finished the second quarter with net worth of $7.4 billion and is required to pay everything above $3 billion to Treasury in return for the taxpayer aid it has received under conservatorship.

The company and Washington-based Fannie Mae were sustained by drawing almost $190 billion in assistance after they were seized amid soaring losses during the subprime mortgage crisis.

The two government-sponsored enterprises returned to profitability as the housing market rebounded. They've paid the Treasury a total of $131.6 billion in dividends, which count as a return on the U.S. investment in the firms and not repayment of their debt to taxpayers.

Fannie Mae and Freddie Mac, which were created by the federal government before becoming publicly traded companies, buy mortgages from lenders and package them into securities on which they guarantee payments of principal and interest.

President Barack Obama yesterday called for the two companies to be replaced with a government mortgage reinsurer that would sustain losses only in catastrophic circumstances.

Hedge funds including Paulson & Co. Inc. have been pushing Congress to abandon plans to liquidate the companies as they buy up preferred stock that has been soaring after being considered worthless, people with knowledge of the discussions have said.

Freddie Mac said in a statement yesterday that Saiyid T. Naqvi, former head of PNC Financial Services Group Inc.'s mortgage unit, has joined its board of directors.

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