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Fannie Mae, Freddie Mac profits fall in Q2

English.news.cn   2014-08-08 11:18:39

WASHINGTON, Aug. 7 (Xinhua) -- U.S. mortgage giants Fannie Mae and Freddie Mac reported net income declines in the second quarter due to lower income from legal settlements, said the two companies on Thursday.

Fannie Mae reported 3.7 billion U.S. dollars of net income from April to June this year, lower than 5.3 billion dollars in the previous quarter and 10.1 billion dollars in the same period of 2013, the government-sponsored enterprise said in a statement.

Freddie Mac posted net income of 1.4 billion dollars for the second quarter, lower than 4 billion dollars earned in the first quarter and 5 billion dollars a year ago.

Net profit falls are primarily due to declines in the amount of income recognized by the two companies from settlement agreements related to private-label mortgage-related securities, according to the statements of Fannie Mae and Freddie Mac.

In September, Fannie Mae and Freddie Mac will pay 3.7 billion dollars and 1.9 billion dollars respectively to the Treasury Department as dividends, making the total amount of money paid by the two giants to the U.S. government reach 218.7 billion dollars.

The two mortgage giants asked for 187.5 billion dollars in aid from the U.S. government and were put under conservatorship after suffering heavy losses from the collapse of the subprime mortgage market in 2008.

The two companies own or guarantee about half of all mortgages in the United States, or nearly 31 million home loans. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past few years.

Editor: Fu Peng
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