home pricesThe quasi-private mortgage-finance company, Fannie Mae, posted a $58.7 billion profit in the first quarter, thanks to recognition of a tax benefit worth $50.6 billion. Fannie Mae generated $8.1 billion in pretax earnings in the first quarter as well. And all of it will be returned to U.S. taxpayers when the firm writes check to the Treasury Department.

The tax benefit is the result of Fannie Mae's reversal of earlier write-downs on deferred-tax assets. Because the company did not expect to earn a profit, the assets were worthless. Now, however, the tide has changed because Fannie believes that its new-found profitability will continue for the foreseeable future, as fewer borrowers default on their mortgage payments and new, more creditworthy buyers enter the housing market.

Following this payment, Fannie Mae will have repaid $95 billion to the Treasury of a total of $116.1 billion the company received as a bailout following the financial crisis of 2008. Fannie's smaller brother, Freddie Mac, has repaid $36.6 billion on a total bailout of $71.3 billion.

Because the government bailout of the two firms did not offer either a way to redeem the federal government's shares, Fannie and Freddie are now making payments on loans that can never be paid off completely.


Filed under: 24/7 Wall St. Wire, Banking & Finance, Housing Tagged: featured

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Morning Ed

My friend confined to a wheelchair, borrowed 100,000 to purches 2 homes, casting almost 300,000, payed on the morgage for 3 years and now she is loosing both houses total loss of more than 500,000. I will bet she will not receive even 1 dollor of thoes billions

May 10 2013 at 10:46 AM Report abuse rate up rate down Reply
axman922

how about bailing out the people who lost homes and jobs due to the bubble! you think anyone is worried about them ? oh I'm sorry time to wake up ! after all this is politicians we are talking about !

May 10 2013 at 4:40 AM Report abuse rate up rate down Reply
Konrad

I'm sure every cent will go to new spending programs (NON TAXPAYERS) instead of going to the taxpayers

May 09 2013 at 7:12 PM Report abuse rate up rate down Reply
Karissa

Should be titled 'finacing congresses next pay raise"

May 09 2013 at 3:23 PM Report abuse +1 rate up rate down Reply
tucsonauto

good for them mean while i LOST MY HOUSE MY EQUITY AND STILL PAYING

May 09 2013 at 1:05 PM Report abuse +1 rate up rate down Reply
1 reply to tucsonauto's comment
joshewe

You only "lose" you house if you do not honor your commitment to make payments on schedule.

May 10 2013 at 10:09 AM Report abuse rate up rate down Reply
Trisha

Paying it back to the "tax payers" huh? Well where is my check?? The cash in hand means "I" got my money back. Let me go check my mailbox! Surely it is in there!!

May 09 2013 at 12:32 PM Report abuse +3 rate up rate down Reply