Fannie Mae Posts $2.2 Billion Net Gain for Second Quarter

Fannie Mae
By MARCY GORDON

Fannie Mae earned $2.2 billion from April through June, its second quarterly gain in net income since being taken over by the government during the 2008 financial crisis.

The mortgage giant attributed the increase to improving home prices and fewer foreclosures. And it said Wednesday that it was paying $2.9 billion to the Treasury Department, its second straight quarterly dividend.

Fannie's net income attributable to common shareholders was 37 cents per share in the second quarter. That compares with a net loss of $5.2 billion, or 90 cents per share, in the same period last year.

"We think home prices have stabilized," Fannie President and CEO Timothy Mayopoulos said in an interview on CNBC.

Fannie has reported gains in net income in both quarters this year. It earned $2.7 billion in the January-March quarter and paid a dividend of $2.8 billion to the Treasury.

The company received about $116 billion from the Treasury Department, the most expensive bailout of a single company. It has so far repaid about $26 billion.

Mayopoulos said he believes the company can be profitable going forward, though that doesn't necessarily mean that Fannie will make enough money to pay a dividend each quarter to the Treasury.

"It's going to depend on home prices," Mayopoulos said.

The housing market has started to recover this year after languishing since the bust in 2006 and 2007. Home sales are higher than last year, although they are still below healthy levels. Home prices are rising in many markets, partly because the supply of homes for sale has fallen.

U.S. home prices, including sales of distressed properties, jumped 2.5 percent in June from the same month in 2011, according to a report issued Tuesday by data analytics firm CoreLogic. And the Standard & Poor's/Case-Shiller home price index reported price increases from April to May in all 20 cities tracked by the survey.

Fannie and smaller sibling Freddie Mac were taken over by the government after massive losses on risky mortgages threatened to topple them.

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

On Tuesday, McLean, Va.-based Freddie reported net income of $1.2 billion for the second quarter and didn't request any additional federal aid for the period. The gain compared with a net loss of $3.76 billion in the same period a year ago.

Fannie and 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 percent 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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36 Comments

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ha6ai

HuffPuff just can't stop spewing Obama-propaganda! What a stupid stupid "story".

Fannie and Freddie owe taxpayers Billions of dollars because of the Democrats sticking the public for the Democrat housing bubble.

August 11 2012 at 5:16 AM Report abuse rate up rate down Reply
chris1011

New Study: Bush Policies, Not Obama, Responsible for US Deficit
8/6/2012
Romney repeatedly accuses the president of “runaway spending” and of “creating a prairie fire of debt.” While one in depth study shows that spending under Obama never happened, a new study reveals that Bush-era policies are primarily responsible for our burgeoning deficit.

This past Thursday, the Center on Budget and Policy Priorities (CBPP) analysis revealed that the Bush tax cuts, the wars in Afghanistan and Iraq, and Bush’s Great Recession account for virtually the entire federal budget deficit.

http://veracitystew.com/2012/08/06/new-study-bush-policies-not-obama-responsible-for-us-deficit/

August 09 2012 at 3:48 PM Report abuse rate up rate down Reply
JUDY

I just read that July was up in foreclosures, so how can they print this garbage.

August 09 2012 at 8:46 AM Report abuse +1 rate up rate down Reply
darkfree

Now if they can just fix Las Vegas as my $216,000 home is now only selling for less than $50,000 ?
I have it rented to get back the vast losses.

August 08 2012 at 10:42 PM Report abuse rate up rate down Reply
redneckpriest

That much ,huh. Then where are all the jobs that rich people & companies are suppost to have since they don't want to be tax more.

August 08 2012 at 10:24 PM Report abuse +2 rate up rate down Reply
ga7smi

do not believe a word of it

August 08 2012 at 9:07 PM Report abuse -1 rate up rate down Reply
1 reply to ga7smi's comment
phasejump

why r u stupid

August 08 2012 at 10:09 PM Report abuse -1 rate up rate down Reply
tim

2.2 Billion dollar profit????? sure it did.....obamanomics at it's best again.

August 08 2012 at 7:50 PM Report abuse +1 rate up rate down Reply
2 replies to tim's comment
patters85

Whatever you want to call it. Obama is getting it done without the help of the GOP mobsters! Just imagine how much profit Fannie would be making if Republicans were not protecting the big banks against under water homes and foreclosures. That famous GOP question "Are you better of today than you were 4 years ago"? Sounds like the answer is a resounding YES,YES,YES!!!

August 08 2012 at 8:19 PM Report abuse +1 rate up rate down Reply
2 replies to patters85's comment
j_swizzle

Man are you braindead washed. You are going to blame the GOP for democratic policies to give mortgages to people that could not afford them in the first place? The real Mobsters are the ones that were banking on the loan pay back failure. The banks got bailed out, what did you get besides the bill. Guess what? The democrats had control of the nations checkbook.Yet you choose to lay the blame on the GOP . Go take your GED class again patter !

August 08 2012 at 10:40 PM Report abuse +2 rate up rate down
chris1011

What an interesting rewrite of history, swizzle. Fact is the exotic mortgages sold by private brokers and banks by far caused the collapse. It was the malfeasance of the private market that did us in, not any government policy for minority home ownership.

In fact, if you look at the aftermath, it is the small minority owned properties that are paying back their loans, and their mortgages are not in jeopardy because this program required tighter restriction on their financial disclosures than those that were offered by the private market like Countrywide Financial.

August 09 2012 at 12:00 PM Report abuse rate up rate down
phasejump

facts r hard aint they

August 08 2012 at 10:10 PM Report abuse -3 rate up rate down Reply
clwgeorgetownlaw

could someone other than ragtopdaz post a comment? What a nut case....

August 08 2012 at 3:42 PM Report abuse -1 rate up rate down Reply
ragtopdaz

Its just like the IRS who spins there own lies about cracking down on delinquent tax payers and brining in millions of un-paid taxes..

The Internal Revenue Service may have delivered more than $5 billion in refund checks to identity thieves who filed fraudulent tax returns for 2011, Treasury Department investigators said Thursday. They estimate another $21 billion could make its way to ID thieves' pockets over the next five years.
The IRS is detecting far fewer fraudulent tax refund claims than actually occur, according to a government audit that warned the widespread problem could undermine public trust in the U.S. tax system.

August 08 2012 at 2:49 PM Report abuse -3 rate up rate down Reply
2 replies to ragtopdaz's comment
patters85

Can't have more investigators with a small government! Isn't that what you teabaggers want? So stop whining.

August 08 2012 at 8:26 PM Report abuse +2 rate up rate down Reply
cindy8556

What I don't understand why the mailman didn't realize something was wrong, delivering a thousand plus refund checks to the same address. Obviously all those people couldn't live there. A red flag should have gone up.

August 09 2012 at 2:43 PM Report abuse rate up rate down Reply
ragtopdaz

Obama's Country is the place for me.

Free livin' is the life for me.

Tax payer money being given out so far and wide. You can keep my old rat hole country, just give me that Obama countryside.
Free Health insurance is right for me , just keep those free benefits coming and I will vote for thee.

August 08 2012 at 2:46 PM Report abuse -1 rate up rate down Reply