Government briefs

From the December issue:  Fannie, Freddie see profits in third quarter

Government-sponsored mortgage backer Freddie Mac posted a $2.9 billion profit in the third quarter, the Wall Street Journal reported, enabling it to make a dividend payment of $1.8 billion to the U.S. Treasury for its taxpayer-financed bailout. That marks Freddie’s fourth-consecutive quarterly gain, and stands in stark contrast to its loss of $4.4 billion in the third quarter of last year. It’s also the second consecutive quarter in which Freddie has not needed any assistance from the government. Fannie Mae, meanwhile, posted a $1.8 billion profit in the third quarter and paid $2.9 billion in dividends to the Treasury, Reuters reported. The profit compares with a loss of $5.1 billion a year ago. For both GSEs, the gains were prompted by stabilizing home prices and stronger demand for housing. “We continue to see home prices improve again in the third quarter, albeit not nearly at the level they did in the second quarter. That is the single biggest driver in the results,” Susan McFarland, Fannie Mae’s chief financial officer, told Reuters. [more]