Fannie Mae not seeking new bailout funds after good quarter
New York, NY, United States (AHN) – Fannie Mae has put its hands back in its pocket.
On Wednesday, the troubled mortgage backer reported its best quarterly results since the housing bubble burst five years ago, and says it doesn’t need to extend it hands out for more bailout money.
Even better, the struggling company reported just enough profit in the there months ended March 31 to cover its latest payment to the Treasury Department. Fannie May also forecast a rosier picture for its future.
Fannie May attributed the much-improved results to a slowing decline in home prices, a drop in its inventory of foreclosed homes and better sale prices for the foreclosed homes it sold.
Following the earnings release, chief financial officer Susan McFarland said in a statement, “We expect our financial results for 2012 to be significantly better than 2011.”
When the housing bubble burst in 2007, Fannie was very adversely affected. The company faced scores of foreclosures that resulted in huge losses.
In the summer of 2008, Congress agreed to cover Fannie Mae’s, and sister company Freddie Mac’s, staggering losses, hoping to prevent both companies from going under and to shore up the ailing housing market.
Since that time, Fannie has been the recipient of $116.1 billion in bailout funds. It has made $22.6 billion in dividend payments to the U.S. Treasury, including the most recent $2.8 billion. The result cost taxpayers $93.5 billion.
Freddie Mac was given $72.3 billion from the Treasury and has paid back $18.3 billion.