Record profit signals healthier Fannie Mae
WASHINGTON — Fannie Mae said something Thursday that would have been unthinkable a few years ago: It earned a record $58.7 billion profit in the January-March quarter.
The government-controlled company, which helps provide money for the U.S. housing market by buying residential mortgages and packaging pools of them for investors, said that it applied tax credits it had saved from its losses on delinquent loans suffered during the crisis to its first-quarter earnings. By applying those credits to its 2013 taxes, Fannie reduced what it owed the government and boosted its profit.
The result: Fannie made more money from January through March than it had in any other quarter. Of the $58.7 billion earned, nearly $51 billion came in part from using the tax credits. That followed $17.2 billion in profit earned last year. And Fannie says it expects to stay profitable for “the foreseeable future.”
Nearly all of that money is going back to the government, which rescued Fannie and Freddie during the 2008 financial crisis with a combined $187 billion in taxpayer-funded loans.
Under a federal policy adopted last summer, Fannie and Freddie must turn over their entire net worth above $3 billion in each quarter to the Treasury. Fannie said its net worth in the first quarter was $62.4 billion.
Fannie will pay a dividend of $59.4 billion to the U.S. Treasury next month. Once that’s paid, Fannie will have repaid $95 billion of the roughly $116 billion it received.
