Tags: Fannie Mae | taxpayer | bailout | mortgage

Fannie Mae to Repay Taxpayer Bailout Next Month

Thursday, 19 Feb 2015 09:38 AM

US mortgage-finance giant Fannie Mae said Friday it plans to pay the US Treasury $7.2 billion in dividends in March, reimbursing in full its 2008 taxpayer-funded bailout.

Fannie Mae reported net income of $6.5 billion in the fourth quarter, its eighth consecutive quarterly profit, and a whopping net profit of $84.0 billion for all of 2013, nearly four times the previous year.

With the March dividend payment, Fannie Mae will have paid $121.1 billion in dividends, eclipsing the $116.1 billion in funding it has drawn since 2008.

The company benefited from a large number of settlements related to the subprime mortgage crisis, including an $11.6 billion payment from Bank of America over soured loans it sold to Fannie.

The company said it expects to remain profitable in the foreseeable future, though income levels are expected to be "substantially lower" than in 2013.

Both Fannie Mae and Freddie Mac, which back most of the mortgages financed in the United States, have been operating under the conservatorship of the Federal Housing Finance Agency since September 2008.

The government stepped in to rescue them from bankruptcy during the financial crisis. The bailout was aimed at providing liquidity and stability to the reeling housing market and halt contagion in the financial sector.

Fannie Mae said that from 2009 through 2013, it provided $4.1 trillion in liquidity to the mortgage markets, supporting 12.3 million mortgage refinancings and 3.7 million home purchases.

Freddie Mac has not yet reported fourth-quarter financial results. Freddie Mac was to pay a $30.4 billion dividend to the Treasury in December, making whole its debt to taxpayers with a total reimbursement of $71.3 billion.

Founded by Congress, the two companies will remain under conservatorship until Congress acts to wind them down or remove government support.


© AFP 2017

   
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US mortgage-finance giant Fannie Mae said Friday it plans to pay the US Treasury $7.2 billion in dividends in March, reimbursing in full its 2008 taxpayer-funded bailout.
Fannie Mae, taxpayer, bailout, mortgage
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2015-38-19
Thursday, 19 Feb 2015 09:38 AM
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