Fannie Mae to Pay Treasury $59.4 Billion After Record Profit

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Fannie Mae to Pay Treasury $59.4 Billion After Record Profit

Fannie Mae (FNMA), the mortgage-financier seized by U.S. regulators in 2008, will pay the Treasury Department $59.4 billion after reporting a record quarterly profit driven by rising home prices and declining delinquencies.

The government-sponsored enterprise, which is operating under U.S. conservatorship, had net income of $8.1 billion for the three-month period that ended March 31, according to a statement released today. The Washington-based company’s net worth, which is used to determine what it owes the U.S., was boosted by a reversal of writedowns on tax credits, which may be valuable now that it’s returned to profitability.

“Even the jaded can’t blink at Fannie’s upcoming payment,” Jim Vogel, a debt strategist at FTN Financial in Memphis, Tennessee, said in a note to clients.

The profits will hurt the pace at which policy makers decide what to do with Fannie Mae and rival Freddie Mac “because they give the illusion” that mortgage finance “is a great business,” Vogel said. “Well, it’s great at this point in the cycle after you’ve wiped out years of accumulated equity and stopped taking much credit risk.”

After its latest payment, Fannie Mae will have sent the Treasury a total of $95 billion, compared with the $117.1 billion of capital infusions that the company has received. Freddie Mac, which yesterday reported a $4.6 billion profit, will have paid $36 billion, after drawing $72 billion of aid, and Chief Executive Officer Don Layton said it may release $30.1 billion of tax-credit writedowns as soon as next quarter.

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Comments
2 Responses to “Fannie Mae to Pay Treasury $59.4 Billion After Record Profit”
  1. 1ofthemany says:

    stolen stolen stolen from the public, flog the imbeciles, how many more HOMES will they steal?!?!???! what a puke-fest, I am so sick of funding this looney bunch of thieves. how did we let it get this far??? jail them all
    soulless creatures they are all of them

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