Fannie Mae Earned a Profit in Q1, Says It Doesn't Need More Aid

Fannie MaeBy MARCY GORDON, AP Business Writer

WASHINGTON -- U.S. mortgage giant Fannie Mae says it made money in the first three months of the year and is not seeking additional federal aid. It's the first time the company has reported a net income gain since it was taken over by the government during the 2008 financial crisis.

Fannie on Wednesday reported that it earned net income attributable to common stockholders of $2.7 billion in the January-March quarter. That compares with a net loss of $6.5 billion in the first quarter of 2011.

The company says the improvement was due primarily to slower home price declines, reduced inventory of single-family homes and fewer mortgages in serious delinquency.

An income gain for the company that required the biggest bailout of the 2008 financial crisis is the latest evidence that the depressed housing market may be slowly starting to recover five years after the housing bubble burst.

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January and February made up the best winter for sales of previously occupied homes in five years. Builders are laying plans to construct more homes in 2012 than at any other point in past 3½ years. Mortgage rates have never been cheaper. And while home prices continue to fall, most cities are reporting smaller annual declines than in previous months.

Fannie has received about $116 billion so far from the Treasury Department.

The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover losses on soured mortgage loans. Since then, a federal regulator -- the Federal Housing Finance Agency -- has controlled their financial decisions.

Taxpayers have spent roughly $170 billion to rescue Fannie and Freddie, the costliest bailout of the 2008 financial crisis. It could cost roughly $260 billion more to support the companies through 2014 after subtracting dividend payments, according to the government.

Last week, Freddie said it was requesting $19 million in additional federal aid after posting a net loss attributable to common stockholders of $1.2 billion for the January-March quarter. That compared with a net loss of $929 million in the same quarter of 2011.

While it was the first time Fannie hasn't requested money since the crisis, Freddie has had a few quarters when it did not seek government aid. Freddie requested $19 million for the January-March period, a relatively small request compared to previous quarters.

Fannie and McLean, Va.-based Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans, which are worth more than $5 trillion. Along with several federal agencies, they backed nearly 90% of new mortgages over the past year.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.

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Finally, we're seeing some light at the end of the tunnel from the Bush with a GOP house and senate economical disaster.

May 10 2012 at 5:23 PM Report abuse -3 rate up rate down Reply

Everybody thought the $700 billion in Tarp money was just down the drain, too. Wrong, we find out later. This is a bit different in many ways, but if they can get back on their feet, perhaps some it not all will come back over time. Return or not, really makes very little difference in why the decision was made to prop them up. If was unfathomable to let 2 quasi companies that own about 1/3 of the mortgages in this country could go down. Also seems that most have forgotten who did Tarp, AIG, and the first rounds of Fannie/Freddie. To refresh your memories, it was not Obama.

May 10 2012 at 2:51 PM Report abuse -1 rate up rate down Reply

More pro-Obama propaganda.

Expect to read lots of bogus "good news" about the economy from AOL/HuffPuff leading up to the election. It will "spin" the news, white-washing the disatrous Obama economy.

How much have taxpayers lost so far on Fannie Mae? Over $152 Billion.

May 10 2012 at 12:52 PM Report abuse +1 rate up rate down Reply

Of course we are happy and don't want more aid as we are perfectly happy with what we got that we don't have to pay back!

May 10 2012 at 12:42 PM Report abuse +3 rate up rate down Reply

255 days
255 days to defeat obama and the diMs
oboMBa truth files
PLEASE go through them and pass around what you believe to be IMPORTANT FACTS on this fraud and his policies and cronies.

May 10 2012 at 11:39 AM Report abuse +1 rate up rate down Reply

Going to perpetuate the failures of the GOP in the 2000's and blame it on Frank forever, eh? How about some reading about just what was going on with FNMA and FMAC and how the GOP-led Congress did nothing about the problem while Frank was in the minority? hate to remind you but this all happened on the GOP watch.

now sasha replies to tjdwill and AOL gets stuck not posting replies FROM ME-
so sasha needs to get back to the white house and further influence national policy with daddy
along with going over to youtube and simply typing in barney frank and a few other !@#$%!s and literally view and HEAR THEIR STATEMENTS.....and NOTE THE YEAR.
\and sasha ALSO needs to review EVERY STATE that dared to PUT GAY MARRIAGE ON THE BALLOT and see the results as in FAIL.
but then again WE KNOW that FACTS NEVER MATTER
but 2012 WILL.

May 10 2012 at 11:31 AM Report abuse rate up rate down Reply
1 reply to Setanta's comment

Your joking right the economy crashed on the Dems watch the economy when the Repubs had controll was booming and it crashed and burned under the Liberal House and Seate why dont you look up the facts before posting your BS.

May 10 2012 at 2:16 PM Report abuse rate up rate down Reply
1 reply to magicgary1960's comment

Aren't you distorting your facts just a little.

May 10 2012 at 3:30 PM Report abuse rate up rate down

AOL playing AGAIN as in "sorry,your comment cannot be posted at this time ?

May 10 2012 at 11:26 AM Report abuse +1 rate up rate down Reply

Ya--they are getting new loans from people that are buying forclosures---are they going to pay back the BILLIONS that they--BORROWED---interest free ????

May 10 2012 at 10:55 AM Report abuse rate up rate down Reply

Yep...all Obama's donor's finally got their money back...he gave them WE THE PEOPLE's money!!!

Biggest thieves on the planet...a United States politician!!!

May 10 2012 at 10:19 AM Report abuse +1 rate up rate down Reply

Sure, they are starting to sell foreclosures........should be enough to keep the execs fat for awhile!

May 10 2012 at 10:02 AM Report abuse -4 rate up rate down Reply