Mortgage giant Freddie Mac reported a $5 billion net income for the second quarter of this year — the second-largest profit in its history — and says it will pay a dividend of $4.4 billion to the U.S. Treasury. So far, Freddie Mac has paid back $41 billion of what it owes to taxpayers. It still owes $30 billion more, and company officials say it hopes to continue paying that down this year.
Freddie Mac came under federal conservatorship in 2008 during the financial crisis.
The recovering housing market has helped Freddie Mac rack up profits in recent quarters, and fewer home owners with Freddie Mac-backed loans are delinquent on them. During the second quarter of this year, 2.79 percent were delinquent, down from 3.03 percent during the same period last year.
“Clearly our outstanding financial results continue to benefit from the turnaround in the housing markets, as well as from our work to minimize losses and build a strong new book of business,” says Freddie Mac CEO Donald H. Layton.
The news of the mortgage giant’s profit comes days after President Barack Obama called for the replacement of Freddie Mac and Fannie Mae with a new federal agency. The president said he wanted to create a financial system that places the most risk on private-sector lenders.
“Earnings like Freddie Mac posted on the second quarter are going to continue to challenge the conviction of lawmakers that are inclined to wind them down,” Tim Rood, former director of Fannie Mae’s eBusiness division, told The Washington Post.
The author of this article is: realtormag.realtor.org
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