Lending giants Fannie Mae and Freddie Mac have had their fair share of the spotlight in recent months. As the mortgage crisis struck in 2008, both of these companies took a huge hit profitability. When the foreclosure crisis began to stir up more trouble the fate of these companies became unclear.
First Quarter Profit
Fannie Mae recently reported its first profit since the financial crisis began in 2008. For the first time in years, Fannie will be paying a dividend to $2.8 billion to the Treasury Department rather than seeking aid from taxpayers. Stockholders will also begin to see some income after the first quarter profits are posted.
Fannie is attributing the gain largely in part due to the slowing of mortgage delinquency rates and the beginning of home value recovery. The losses Fannie and Freddie have suffered over the last few years is expected to do a turnaround in the coming years as the mortgage industry recovers. Part of the recovery efforts have been spurred by federal programs designed to help homeowners avoid foreclosure by offering lenders incentives to participate in more loan modification and refinancing offers.