U.S. Projects $179 Billion Profit From Fannie Mae, Freddie Mac

March 10 (Bloomberg) -- Fannie Mae and Freddie Mac could return $179.2 billion in profits to taxpayers over the next 10 years if they continue operating under federal conservatorship, according to White House budget analysts.

The U.S.-owned mortgage-finance companies, seized by regulators during the 2008 credit crisis, have returned to profitability as the housing market recovers. By the end of this month, they will have sent $202.9 billion back to the Treasury, which counts as dividends on the U.S. investment and not repayment of the $187.5 billion they got in taxpayer aid.

The projections, released today as part of an annual analysis prepared by the Office of Management and Budget, show an increase from last year, when budget writers forecast a $51 billion profit from Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac through 2023.

Congress is working on legislation to wind down and replace the two companies. Investors in the two companies including hedge fund Perry Capital and mutual-fund firm Fairholme Capital Management have sued the U.S. challenging an arrangement in which the government takes all of the companies’ quarterly profits as dividends.

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editors responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net Gregory Mott, Anthony Gnoffo