Mortgage giant Fannie Mae reported $17.2 billion for net income in 2012, its largest annual profit ever, The Wall Street Journal reports.
The housing market’s recovery is leading to fewer loans going bad, which is in turn helping Fannie see rising profits. Timothy Mayopoulos, Fannie’s chief executive, said he expects Fannie to “remain profitable for the foreseeable future.”
In the fourth quarter of 2012, Fannie posted a $7.6 billion profit. That’s compared to one year earlier, in which the mortgage giant posted a net loss of $2.4 billion.
Fannie officials say they expect to post a large gain for earnings in the first-quarter of 2013, which it will report next month.
Fellow government-sponsored enterprise, Freddie Mac, also reported its own record profit for 2012: $11 billion last year.
Fannie and Freddie have received $187.5 billion from the U.S. Treasury when taxpayer bailout money was needed to keep the GSEs afloat as distressed properties were surging. Fannie Mae and Freddie Mac now send nearly all their profits to the U.S. Treasury. “As a result, they have gone from being a major drain on the government’s coffers to a significant potential source of revenue,” The Wall Street Journal reports.
Source: “Fannie’s Windfall Blurs Debate Over Its Fate,” The Wall Street Journal (April 2, 2013)
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