Fannie reaches milestone with largest-ever profit
Fannie Mae posted a $17.2 billion profit for 2012, which marks the government-sponsored mortgage backer’s first annual profit since 2006 and its largest-ever annual profit, the Wall Street Journal reported. The sum stands stand in stark contrast to the lender’s recorded 2011 loss of $16.9 billion.
The reason for the improvement is twofold: An improving housing market and declines in foreclosures. However, the Journal writes that the overall improving economy and low interest rates also have pull.
Activity at the end of the year added steam to the 2012 profits. In the fourth quarter alone, Fannie posted a $7.6 billion profit — up nearly $6 billion from the previous quarter. Totals for the first quarter of 2013 will come out next month and could be even larger.
Fannie received just over $116 billion in federal aid. Roughly $36 billion has been paid back in dividends. [WSJ] —Zachary Kussin