Fannie Mae enjoys biggest year - ever
U.S. mortgage giant helped by record fourth quarter
U.S. mortgage giant Fannie Mae earned $17.2 billion last year, the biggest annual profit in the company's history. Credit is being given to its record fourth quarter. Last year's gain was driven by housing recovery, which has reduced delinquencies and lifted home prices six years after the recession.
Overall, the gradual recovery of the housing market has enabled both companies to become profitable again. Freddie Mac has posted positive net earnings for the past five quarters.
Fannie said it expects to remain profitable "for the foreseeable future." Adding to the success was the fact that the company did not see any federal assistance in 2012, following a year in which the company reported a net loss of $16.9 billion and requested $25.9 billion in federal assistance.
Taxpayers had run to Fannie Mae's rescue to the tune of $188 billion, along with smaller sibling Freddie Mac after risky loans that triggered the 2008 financial crisis. Fannie received $116 billion and has paid back $35.6 billion. Freddie received $72 billion, and has paid back nearly $20 billion.
Overall, the gradual recovery of the housing market has enabled both companies to become profitable again. Freddie has posted positive net earnings for the past five quarters.
Fannie earned $7.6 billion in the October-December quarter, half of that gain came from a legal settlement with Bank of America. Fannie paid the Treasury Department a quarterly dividend of $2.9 billion.
Under a federal policy adopted last summer, Fannie and Freddie must turn over their quarterly profits to the government.
The fourth-quarter earnings compared with a net loss of $2.4 billion in the final quarter of 2011.
Fannie and Freddie together own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans. Those loans are worth more than $5 trillion. Along with other federal agencies, they back roughly 90 percent of new mortgages.
© 2013, Distributed by NEWS CONSORTIUM.
Pope Francis Prayer Intentions for December 2013
General Intention: Victimized Children. That children who are victims of abandonment or violence may find the love and protection they need.
Missionary Intention: Prepare the Savior's Coming. That Christians, enlightened by the Word incarnate, may prepare humanity for the Savior's coming.
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