Fannie Mae sending $4.4B to Treasury

Fannie Mae sending $4.4B to Treasury
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Government-controlled mortgage giant Fannie Mae is sending $4.4 billion in second quarter profits to the Treasury next month.

Fannie Mae, which was taken under government control during the 2008 financial crisis, on Thursday reported a profit of $4.6 billion during the April to June quarter, mostly on increased interest rates.

That profit is a boost from $3.7 billion during the same period a year ago.

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“We have reduced the risk of our business and have made great strides in transferring credit risk to private capital to better protect taxpayers,” said Timothy Mayopoulos, Fannie’s president and chief executive officer, in a statement.

“We continue to make changes throughout our company that improve the way we work and increase the value we provide to the housing finance system,” he said.

With the September payment, Fannie, which posted its 14th-straight profitable quarter, will have paid a total $142.5 billion in dividends.

Fannie received a $116 billion taxpayer bailout during the 2008 financial crisis to keep it afloat. But those payments to the Treasury don't count toward paying off the taxpayer loan.

Meanwhile, Freddie Mac on Tuesday reported a second-quarter profit of $4.2 billion, up from the $1.4 billion during the same period of 2014.

Freddie will pay a $3.9 billion dividend to the Treasury in September, bringing its total payments to $96.5 billion, well above the $71 billion it received from taxpayers.

Fannie and Freddie received nearly $188 billion in taxpayer during the financial crisis.

Fannie and Freddie back about 90 percent of all new mortgages and have a portfolio worth about $5 trillion, nearly half of all loans.

Although the two companies don't make loans to borrowers, they buy them from lenders and guarantee them against default, which helps provide for more lending.