Freddie Mac clears profit for a second straight quarter

Freddie Mac reported a profit for a second straight quarter, reflecting the improving health of the mortgage giant that is still under government control.

The agency posted a net income of $2.9 billion for the July-September quarter, up slightly from $3 billion in the previous three months, meaning it won't need any federal aid as the housing market's recovery turns the corner, thanks to home prices increasing, fewer delinquent loans and growing confidence within the industry. 

"Freddie Mac's strong financial performance this quarter was driven by favorable market conditions, including the continued improvement in the housing market, as well as our ongoing efforts to minimize losses on our legacy book,” said Donald Layton, Freddie Mac's chief executive. 

“Our inventory of delinquent loans is at the lowest level in two years and our higher quality new book of business now comprises 60 percent of our portfolio."

Freddie forked out a dividend of $1.8 billion to the Treasury.

The agency has not needed to borrow from the federal government in six months after requesting $19 million in the first three months of the year. 

For the first nine months of the year, Freddie Mac’s net income was $6.5 billion and its comprehensive income was $10.3 billion.

The profit compares with a $6 billion loss during the same period last year. 

During the financial crisis in 2008, Freddie and Fannie Mae, which hold about $5 trillion in mortgages, were taken under government control to avoid collapse, and have received upward of $190 billion in taxpayer funding. 

In an effort to pay back taxpayers, the agencies have to hand over their profits to the government. 

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