Federal National Mortgage Association (OTCBB:FNMA)
Mortgage financier Federal National Mortgage Association (OTCBB:FNMA) turned in a record profit of $58.7 billion for the March quarter, indicating optimistic times for the housing sector ahead.
The bounce-back by the company, which was caught bang in the centre of the mortgage crisis in 2008, has surprised many as it was the recipient of one of the most expensive bailouts that corporate America saw.
There is no doubt that demand for housing has been rising over the past one year and while it may not have reached the heights it did before the sub-prime mortgage crisis, it is nevertheless buoyant.
Prices are rising at the fastest rate since the housing bubble burst and banks, chastened by their previous losses, are making sure that they are ending only to qualified buyers.
Between them, Fannie Mae and Freddie Mac own or guarantee nearly half of all U.S. mortgages while backing nearly 90 percent of all new ones.
Of the total profits it earned, Fannie Mae said that about $51 billion came in part from using the tax credits. That followed $17.2 billion in profit earned last year. And Fannie says it expects to stay profitable for “the foreseeable future.”
Most of the money that the company has earned will go back to the government, as per an agreement when it was rescued by the government.
Under a federal policy adopted last summer, Fannie and Freddie must turn over their entire net worth above $3 billion in each quarter to the Treasury. Fannie said its net worth in the first quarter was $62.4 billion.
Fannie will pay a dividend of $59.4 billion to the U.S. Treasury next month. Once that’s paid, Fannie will have repaid $95 billion of the roughly $116 billion it received.
Source: http://usmarketbuzz.com/federal-national-mortgage-association-otcbbfnma-reports-record-profit-in-march-quarter-5114#
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