09 May 2012

Fannie Mae Won't Need Taxpayer Money This Time

Story first appeared in The Los Angeles Times.
WASHINGTON — Fannie Mae on Wednesday reported a $2.7-billion profit for the first three months of the year and will not need new taxpayer money for the first time since the government seized the housing finance giant in 2008.

Fannie Mae said the improvement in its finances came from a slower decline in housing prices, a lower rate of homeowners behind on their payments and fewer foreclosed homes on the company's books.

The profit was its first since the fourth quarter of 2010, when Fannie Mae made about $73 million. But even with a profit then, the company needed $2.6 billion from the federal government to stay afloat.

It has received about $116.2 billion in taxpayer money since it was placed into government conservatorship in 2008. Fannie Mae buys and insures mortgages and, along with Freddie Mac, plays a crucial role in the housing fiance market.

On Wednesday, Fannie Mae said it would not need government aid to cover its first quarter expenses and expected its 2012 financial performance to be better than last year's.

The announcement marked a potential turning point in one of the most expensive bailouts stemming from the financial crisis. In addition to the money given to Fannie Mae, the government has pumped an additional $71.3 billion into the smaller Freddie Mac.

Last week, Freddie Mac reported a net loss of $1.2 billion and requested an additional $19 million from the government. Freddie Mac received $146 million for the fourth quarter of last year but has not required taxpayer money in four different quarters since 2008.

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