Fannie Mae set to pay Treasury $919 million

Mortgage giant Fannie Mae will pay the Treasury Department a dividend next month after posting net income of $1.1 billion in the January–March period. 

The government-controlled enterprise will pay $919 million to the Treasury in June following its 17th straight quarter of profits.

{mosads}“We continue to run our business well while supporting the improving housing market,” said Timothy Mayopoulos, president and chief executive officer of Fannie.

“The changes we have made to the company have put us in a stronger position to fulfill our responsibility to deliver safe, affordable mortgage financing for our customers, in all markets at all times,” Mayopoulos said. 

Concern has grown on Capitol Hill and across the mortgage and housing industries about the lack of a plan to overhaul and wind down Fannie and smaller sibling organization Freddie Mac despite several proposals in Congress. 

The Senate Banking Committee approved legislation nearly two years ago but was never able to bring a bill to the floor or reach a deal with the House to clear Congress. 

Profits fell from $2.5 billion in the final three months of last year and from $1.9 billion from the same quarter last year, mostly due to longer-term interest rates affecting the value of the company’s risk management derivatives.

The company reported a positive net worth of $2.1 billion for the first quarter.

Fannie and Freddie needed a total of $188 billion to stay afloat during the 2008 financial crisis. 

With the June payment, Fannie will have paid a total $148.5 billion in dividends, more than the $116 billion it received from taxpayers.

Freddie needed a $71.3 billion and has paid $98.2 billion in dividends.

The payments don’t count toward reducing their debt to the taxpayers.

On Tuesday, Freddie reported a net loss of $354 million for the first quarter and so it won’t pay a quarterly dividend to the Treasury next month. 

Fannie and Freddie don’t make loans to borrowers. They buy and guarantee about half of the nation’s mortgages against default.