May 14, 2012

Fannie & Freddie Bailout Tally, Earnings

May 14, 2012

Fannie & Freddie Bailout Tally, Earnings

Editor’s Note: This got lost in shuffle last week, but still relevant so publishing now.


Last week, Fannie Mae reported a profit in the first-quarter and does not need a quarterly infusion of money from us for the first time since the government seized it in 2008.

A profit of $2.7 billion is nothing to sneeze at, and more than makes up for the loss of $2.4 billion in the fourth quarter of 2011.

And don’t forget that 10% dividend paid out to the government, rain or shine, even if sometimes it comes from the same U.S. Government – just from a different pocket.

Fannie set aside $74.6 billion at the end of the first quarter to cover future losses, down from $76.9 billion at the end of last year.

And, whether you want to attribute it to an improving housing market or to loans passing through the system, the percentage of Fannie Mae loans that were more than 90 days delinquent dropped to 3.7% at the end of the first quarter, the eighth consecutive quarterly decline.

Fannie Mae has received about $116 billion in taxpayer money since its takeover, and has paid about $23 billion back to the government in dividends, lowering the overall cost of its bailout to $93.6 billion.

Over at Freddie, taxpayers have pumped an additional $71 billion, which has paid about $18 billion in dividends back to the government.

On May 3, Freddie Mac reported a $577 million profit for the first quarter, but requested $19 million from the government to bolster its finances and help make its $1.8 billion dividend payment.

Of course there is disagreement about how much the final tally of bailout will be, ranging from the Obama Administration’s $28 billion to the FHFA’s $220-311 billion.
Further Reference:
Fannie Mae: Profit Rebound Winner (TheStreet)
Fannie Mae 1Q2012 Earnings: Report | Supplement (good stats/slides)
Freddie Mac 1Q2012 Earnings: Report | Supplement (good stats/slides)