Mortgage giants Freddie Mac, Fannie Mae have solid second quarter

FILE – This July 13, 2008 file photo shows Freddie Mac’s corporate offices in McLean, Va. Freddie Mac reports quarterly financial results on Thursday, Aug. 7, 2014. (AP Photo/Pablo Martinez Monsivais, File)

Another sign emerged Thursday that the impact of the financial market meltdown is behind us.

Mortgage giants Freddie Mac and Fannie Mae both reported solid profits between April and June. But results for both were below the first quarter and year-ago period in response to the housing market softening and other factors.

Freddie Mac reported second quarter net income of $1.4 billion, down from $4 billion in the first quarter and $4.99 billion in the comparable period a year earlier.

Net income in the second quarter of 2013 was driven by rising home prices and a one-time infusion of cash from settlements from financial institutions, said Freddie Mac spokeswoman Lisa Gagnon.

Freddie Mac will pay a dividend of $1.9 billion to the government. That will bring the total paid by the McLean, Virginia-based company to $88.2 billion, exceeding its full government bailout of $71.3 billion that began in September 2008 as financial collapse threatened both mortgage giants.

Freddie CEO Don Layton remained upbeat about the government backed entity.

“All in all, we feel very good about our progress in the first half of 2014 and we continue to look to the future — building a stronger company and leading the efforts to make the mortgage market work better to the benefit of the entire country,” he said during a conference call.

“It was a solid quarter for Freddie Mac, our 11th consecutive quarter of profitability.”

Washington, D.C.-based Fannie Mae said that it earned $3.7 billion in the first quarter, down from $5.3 billion in the first quarter and $10.1 billion a year earlier.

Fannie Mae said it will pay the government $3.7 billion in dividends in September. That will bring the total to $130.5 billion since the bailout, exceeding the $116.1 billion the company received.

The company said that it has funded the mortgage market with more than $4.2 trillion since 2009, including about $96 billion in the second quarter. And it said it has helped distressed families retain their homes or avoid foreclosure through more than 1.6 million loan workouts since 2009.

The two companies are government-sponsored enterprises and as such do not directly make loans to consumers. The buy loans from lenders, package them as securities and sell them to investors.

An effort is underway in Washington to dismantle the two companies. In May the Senate banking committee approved a bill to get rid of Fannie Mae and Freddie Mac, but not by a large enough majority to get it to the full Senate floor this year.

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