Net income was $5.1 billion in the second quarter, enough to offset a dividend payment to the Treasury of $2.9 billion, Washington-based Fannie Mae (FNMA) said today in a statement. The profit compared with a $2.89 billion loss in the same period a year earlier.
Earnings benefited from a decline in single-family loans more than 90-days delinquent and improved sale prices on the foreclosed homes the company owns, Fannie Mae said.
“We are probably in a place now where we are more likely to make money than lose money,” Susan McFarland, Fannie Mae’s chief financial officer, said in an interview.
McFarland said it was possible the company could need to take draws from the Treasury in future quarters when home-price increases might not be as strong.
“The magnitude of the home-price improvement that we saw was greater than we would have expected from normal seasonal upticks, so that’s encouraging,” she said. “But I don’t think we’re going to see the level of earnings repeat itself quarter in and quarter out.”
Fannie Mae’s sister company, McLean, Virginia-based Freddie Mac (FMCC), said yesterday it wouldn’t need a Treasury draw for the first time since the first quarter of 2011. Freddie Mac reported net income of $3 billion in the second quarter, even after a dividend payment to the Treasury of $1.8 billion.
Fannie Mae and Freddie Mac have taken a total of almost $190 billion in U.S. aid since they went into conservatorship in September 2008 after investments in risky loans pushed them to the brink of insolvency. The companies own or guarantee more than half of U.S. home loans.
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