Fannie Mae profits exceed amount of taxpayer bailout

Government-controlled mortgage giant Fannie Mae's profits has eclipsed the $116.1 billion it needed in taxpayer bailout funds more than five years ago. 

On Friday, Fannie announced it would pay the Treasury Department a dividend of about $7.2 billion — on net income of $6.5 billion in the fourth quarter — pushing its total to $121.1 billion, covering the cost of the aid it needed to stay afloat during the 2008 financial crisis.

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Total earnings for last year rose to a record-high $84 billion.

Technically, the profits count as a return on the Treasury's investment but not as a repayment to taxpayers. 

Congress is working on several different housing finance proposals that would eventually unwind Fannie and Freddie Mac over several years, rebalancing the mortgage market between government and private investment. 

Fannie CEO Timothy Mayopoulos said Friday that profitability should not be "interpreted as a reason for delaying housing finance reform.”

Rep. Maxine Waters, ranking member of the House Financial Services Committee, said Friday that the return to profitability "is a welcome sign for our economy, housing market and for the American taxpayers."

The California Democrat is planning, next week, to discuss a proposal with members of her party on the Financial Services panel that would overhaul Fannie and Freddie. 

Her plan would preserve the 30-year, fixed-rate mortgage and provide an explicit government guarantee that is paid for by industry.

The proposal would also end the perverse incentives created by Fannie and Freddie's ownership structure of private shareholders.

House Republicans produced a plan last summer that hasn't gained any momentum in the lower chamber. 

Two senators — Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) — also have a plan that is being used as a foundation for a bill being worked on by Senate Banking Committee leaders.