Freddie Mac posts the second biggest profit in its history

 
City A.M. Reporter
FREDDIE MAC, the second-largest provider of US mortgage money, yesterday said it reaped its second-largest profit ever in the first quarter, a reflection of housing market gains that have taken the steam out of efforts to revamp the nation’s home loan system.

The government-controlled company reported net income of $4.6bn (£2.9bn) for the first three months of the year, up from $577m in the year-ago quarter. It cited rising home prices, falling mortgage delinquencies and increased refinance activity for the improved performance.

It was the company’s sixth straight quarterly profit and the largest since a $5.7bn gain in the third quarter of 2002.

“The strong rebound in the housing market continues to be reflected in our excellent financial performance,” Freddie Mac chief executive officer Donald Layton said.

Freddie Mac, which faced insolvency when it was seized by the US government in 2008 along with its larger rival Fannie Mae, paid $5.8bn to the US Treasury in the first quarter as a dividend payment under the terms of its government bailout.

It said it would make another $7bn payment in June, and suggested it could make an even bigger payment soon after.