Thursday, August 8, 2013
Driven by a recovery in the U.S. housing market, mortgage finance giant Fannie Mae netted profits of $10.1 billion in the second quarter, its sixth-straight quarter with positive results. The company, which has operated under federal conservatorship since 2008, reported its earnings Thursday.
Fannie Mae cited "a significant increase in home prices in the quarter," which nearly doubled that of last year's second quarter.
The strong showing leaves Fannie Mae with a net worth of $13.2 billion. Because federal rules require it to maintain a reserve of $3 billion, the company will pay $10.2 billion to the U.S. government this September. Fannie Mae says the payment will bring the total it has delivered to around $105 billion.
To survive the mortgage crisis that came to a head in the autumn of 2008, Fannie Mae received more than $116 billion from the U.S. government.
In its quarterly report, Fannie Mae says it "expects to remain profitable for the foreseeable future," with stable revenues and strong earnings. It also said it will pay "substantial" income taxes to the U.S. Treasury.
As we reported yesterday, the other large government-backed mortgage company, Freddie Mac, earned $5 billion in the first three months of the year.
The future of the U.S. mortgage industry is the subject of debate in Washington, with President Obama saying this week that "private lending should be the backbone of the housing market," as The Wall Street Journal reports.
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