Fannie Mae reports income gain for first time since 2008

by Vicki Needham - 05/09/12 4:04 PM ET

“Today’s results exemplify the tremendous progress we have made since 2009,” said Michael Williams, president and chief executive officer. “Our financial performance has improved significantly and we successfully limited losses on the legacy book of business through our efforts to help homeowners avoid foreclosure.”

Taxpayers have shelled out $116 billion to keep Fannie afloat through the housing and broader financial crisis.

Lawmakers and the Obama administration continue to examine ways to help homeowners avoid foreclosure, thus reducing the burden on the books of Fannie and its companion lender, Freddie Mac.

Freddie announced last week that it needed another $19 million in federal assistance after posting a net loss of $1.2 billion for the first quarter, compared with a net loss of $929 million in the same quarter of 2011.

Freddie has accepted more than $72 billion in federal aid — bringing the total for the two firms, which guarantee $5 trillion in home loans — to more than $188 billion.

The Federal Housing Finance Agency oversees Fannie and Freddie.

Housing experts are expecting the market to heal faster this year with better sales, stronger prices and fewer foreclosures.

“We expect our financial results for 2012 to be significantly better than 2011,” said Susan McFarland, executive vice president and chief financial officer.

“Our credit performance is headed in the right direction with significant improvement since 2009, and we expect that the reserves we have built to cover future credit losses on the pre-2009 legacy book of business have reached their peak.”