WASHINGTON (5/10/13)--Fannie Mae will soon pay a whopping $59.4 billion in dividends to the U.S. Treasury as it continues to settle debts incurred following a 2008 government conservatorship.
Fannie Mae reported total pre-tax income of $8.1 billion for the first quarter of 2013, the largest quarterly pre-tax income in company history. The record income was due to strong credit results and increased revenue, Fannie Mae said. The government sponsored enterprise (GSE) also released a $50.6 billion valuation allowance on deferred tax assets.
Fellow GSE Freddie Mac also reported near-record profits during the first quarter: that company brought in $4.6 billion in funds.
Fannie and Freddie are currently making quarterly dividend payments to the federal government to repay funds that were used to bail out the two firms. Fannie Mae's portion of those payments will total $95 billion once the $59.4 billion payment is made, the GSE said. The payment will be made by June 30, according to the company. Freddie Mac said it paid $7 billion to the Treasury in the first quarter.
The GSEs have been held under government conservatorship since 2008, and they continue to repay more than $150 billion in taxpayer funds that were used to prop them up.
Some have speculated that the Fannie and Freddie profits, and the resulting repayments, could slow the tempo of GSE reform efforts.
A range of housing policy changes have been discussed by the U.S. House, the Senate, and the Obama administration in recent months, including full market privatization, limiting government market intervention, and several stops in-between.
"Lawmakers in Washington agree on the need to draw private capital back into the mortgage market but no consensus on how to do so has formed," Federal Housing Finance Agency Acting Director Ed DeMarco said in remarks delivered Thursday to the Federal Reserve Bank of Chicago's 49th Annual Conference on Bank Structure and Competition.
Ensuring that credit union interests are represented in any reform of the housing finance system is one of the Credit Union National Association's top 2013 legislative objectives. CUNA has repeatedly said that any changes to secondary mortgage market structure must allow credit unions and other small issuers to maintain full and unrestricted access to that market. CUNA has also highlighted the importance of preserving 30-year, fixed-rate mortgages and ensuring that the secondary market is strong enough to weather economic adversity.
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