Fannie Mae pays off bailout debt

by MPA21 Feb 2014
Fannie Mae is back in the black. The mortgage finance giant reported an annual profit of $84bn today, according to a MarketWatch report. Fannie also announced it would pay the Treasury $7.2bn next month after reporting a $6.5bn Q4 profit.

And with that payment, Fannie Mae and Freddie Mac will have paid the government more in dividends than they took during their 2008 bailout.

Fannie and Freddie were placed under government conservatorship in 2008 after teetering on the brink of collapse in the wake of the financial meltdown. But after being bailed out to the tune of more than $187bn, the companies have consistently returned billions of dollars to the Treasury each quarter.

And even now that the bailout funds are repaid, the money will keep rolling in. The government didn’t exactly loan the GSEs $187.5bn – it took shares of “senior preferred stock.” Which means that Fannie and Freddie still owe the government all their profits as dividend payments.
 

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