Second straight quarter of profit for loan giant
By Marcy Gordon
AP Business Writer
WASHINGTON (AP) — Freddie Mac earned $5 billion from April through March, the seventh straight profitable quarter for the mortgage giant.
The second-quarter gain reported Wednesday compares with net income of $3 billion in the same period of 2012. Freddie says their earnings were due largely to increased profits from investments made to hedge against rising interest rates.
Freddie will pay a dividend of $4.4 billion to the U.S. Treasury next month.
The government rescued Freddie and larger sibling Fannie Mae during the financial crisis in 2008. Together, they received loans of about $187 billion.
A housing recovery that began last year has made both profitable again. Combined, they have paid back roughly $136 billion of their government loans. Those payments are helping to make this year’s federal budget deficit the smallest since President Barack Obama took office.
On Tuesday, Obama proposed a broad overhaul of the U.S. mortgage finance system, including winding down Fannie and Freddie. He wants to replace them with a system that would put the private sector, not the government, primarily at risk for the loans.
