Freddie Mac Ends 2012 With Profit on Gains in U.S. HousingClea Benson
Freddie Mac said rising home prices and falling mortgage delinquencies helped it post a profit for the fourth quarter and all of 2012, allowing it to avoid drawing more funds from U.S. taxpayers.
The U.S.-owned mortgage financier, based in McLean, Virginia, had net income of $4.5 billion for the three months ended Dec. 31 after accounting for a $5.8 billion dividend payment to the Treasury Department for the government stake, the company said today in a statement.
“It’s clear from our earnings that the housing market has turned a corner and that our work to minimize legacy losses and build a strong new book of business is paying off,” Freddie Mac Chief Executive Officer Donald Layton said in the statement.
For all of 2012, Freddie Mac reported net income of $11 billion, compared with a net loss of $5.3 billion in 2011.
Freddie Mac and Washington-based Fannie Mae have received almost $190 billion in U.S. assistance since they were taken into federal conservatorship in September 2008 amid losses on risky loans that pushed them to the brink of insolvency.
Freddie Mac has paid $23.8 billion in dividends, about a third of the amount it has taken in Treasury aid.
Starting this year, the two taxpayer-owned companies will cease paying 10 percent dividends to the Treasury and will instead pay any profits above a permitted capital reserve.