Another Mortgage Giant Posts Quarterly Profit
Fannie Mae announced that an improving housing market has helped it post a $1.8 billion profit during the third quarter, and as such, the mortgage giant will not be needing to ask for more aid in taxpayer bailout money.
A year prior, Fannie Mae reported a loss of $5.1 billion.
“We are seeing signs of sustained improvement in housing and our actions to support the housing recovery have generated strong financial results in 2012,” says Timothy Mayopoulos, Fannie Mae’s chief executive.
Rising home prices and lower credit losses are helping to move Fannie to profit, Fannie reports. Credit losses fell to $3.5 billion from $4.5 billion a year prior.
“We continue to see home prices improve again in the third quarter, albeit not nearly at the level they did in the second quarter. That is the single biggest driver in the results,” says Susan McFarland, chief financial officer. “We’ve got to continue to work through the delinquent book of loans.”
Earlier this week, Freddie Mac reported a $2.9 billion third-quarter profit.
Beginning this year, Freddie Mac and Fannie Mae are required to hand over any profits they post to the Treasury in a form of a dividend payment.