WASHINGTON – Troubled secondary mortgage market giant Freddie Mac reported net income of $2.9 billion this morning for its second quarter, its second straight quarterly profit and the latest sign of a rebounding mortgage market.
The second quarter net makes a total of $6.5 billion in profits for the first nine months of the year and means that Freddie will not seek government bailout cash for a second straight quarter. The company reported a $6 billion net in the second quarter.
“Freddie Mac's strong financial performance this quarter was driven by favorable market conditions, including the continued improvement in the housing market, as well as our ongoing efforts to minimize losses on our legacy book,” said Freddie Mac CEO Donald Layton. “Our inventory of delinquent loans is at the lowest level in two years and our higher quality new book of business now comprises 60% of our portfolio.”
Over the past three years Freddie Mac, taken over by the government in September 2008 with Fannie Mae, has racked up $81 billion in losses.
During the third quarter, Fannie and Freddie, which have been required to pay a dividend to the government as part of the bailout, entered into an amended agreement under which they will only be required to pay a dividend if their net worth exceeds certain thresholds.