FANNIE Mae, the US mortgage finance firm bailed out by the government at the height of the financial crisis, saw profits double over the past quarter, enabling it to pay a further $10.2bn (£6.4bn) dividend to the US Treasury.
Thanks to a sharp rise in house prices, the firm yesterday reported a profit of $10.1bn in the three months to 30 June, up from $5.1bn for the same period a year ago.
The strong performance marks the mortgage giant’s sixth consecutive profit. In total it has now paid dividends equal to 90 per cent of the $117.1bn it received from taxpayer funds in 2008.
However, the terms of the rescue deal, which gave the government controlling stakes in both it and sister firm Freddie Mac, mean their profits all go the US Treasury, and cannot be used to pay off their rescue debts. The arrangement means that the government currently backs about 90 per cent of the US mortgage market. President Obama has said he wants to wind both the firms down to reduce its share of the housing market.
Fannie Mae chief executive Timothy Mayopoulos said this would take years to achieve: “We would expect to continue to be focused on returning as much value to taxpayers in the meantime.”