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WASHINGTON (AP) — The federal government on Thursday reported a rare surplus of $116.5 billion in June, the largest for a single month in five years. The gain kept the nation on track for its lowest annual deficit in five years.
The June surplus was due in part to $66.3 billion in dividend payments from Fannie Mae and Freddie Mac. The mortgage giants were taken over by the government at the height of the 2008 financial crisis and are now repaying taxpayers for the support they received.
After five years of losses totaling an unprecedented $164 billion, Fannie Mae earned a $17 billion profit in 2012, its most profitable year ever. Freddie Mac, which racked up $94 billion in losses between 2007 and 2011, earned $11 billion in 2012. Both agencies have stopped drawing taxpayer money, and through the end of 2012 they had remitted $55.2 billion worth of dividend payments to the Treasury.
It's now possible to foresee the point at which the two agencies will pay back all the taxpayer money they required. Moody's Analytics estimates that on their current course, Fannie and Freddie will return everything they owe by 2019. The break-even date could occur much sooner—perhaps just a couple of years from now—if the agencies are permitted to claim a tax break allowing them to deduct some portion of past losses.
Fannie Mae and Freddie Mac currently back nearly two-thirds of U.S. mortgages, while FHA loans, which are also sponsored by the government, account for just over 30 percent of the market total, analysts say. In the wake of a housing bust that has left banks and private investors leery of buying mortgages, the three entities now underwrite or insure about 95 percent of mortgages originated today.
Originally posted by HauntWok
reply to post by neo96
Never give the hate a rest do ya Neo?
Fannie and Freddie back mortgages, this is true, but it's not taxes that are paying our bailout of them back, it's people who are paying their mortgage. Isn't it nice news that people are able to pay their mortgage and therefore Fannie and Freddie are able to pay us taxpayers back for our investment?
After five years of losses totaling an unprecedented $164 billion,
Yeah, is nice to be able to pay back with more money from the tax payers, a vicious cycle.