US government-controlled mortgage finance giant Freddie Mac reported Tuesday $3.0 billion net profit for the second quarter and said it was not seeking US taxpayer aid for the period. Freddie Mac said the profit improvement, from $577 million in the first quarter, primarily reflected a decline in the provision for credit losses due to "positive trends" in the housing market.
Excluding a dividend of $1.83 billion paid to the government, its main shareholder, profit was $1.21 billion in the April-June period. In the 2011 second quarter, the McLean, Virginia-based company had a loss of $2.14 billion. Freddie Mac booked $155 million in provisions for credit losses for the second quarter, sharply below the $1.8 billion taken in the first quarter, citing "the positive impact of an increase in national home prices."
Freddie Mac and sister institution Fannie Mae, the two largest US mortgage finance lenders, were seized by the government in September 2008 to prevent their collapse and given a $180 billion bailout. The two currently hold or guarantee about half of all US mortgages. Both are required to pay the US Treasury a dividend of 10 percent annually of the money they have received from the government.
Freddie Mac said Tuesday it had received $72.3 billion in federal capital injections and paid $20.1 billion in dividends, or 28 percent of the amount received. Six years after the collapse of a housing price bubble, the housing market has been showing signs of improvement, with home prices rising in certain areas. The depressed housing market and high unemployment, at 8.3 percent, are key reasons the world's largest economy is struggling with sub-par growth.
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