Economics: Fannie Mae Posts $2.2B Net Gain for Q2

Fannie Mae earned $2.2 billion from April through June, its second quarterly gain in net income since being taken over by the government during the 2008 financial crisis.

Fannie and smaller sibling Freddie Mac were taken over by the government after massive losses on risky mortgages threatened to topple them.

Fannie has received about $116 billion so far from the Treasury Department, the most expensive bailout of a single company. So far Fannie has repaid about $26 billion of that bailout.

Taxpayers have spent about $170 billion to rescue Fannie and Freddie. It could cost roughly $260 billion more to support the companies through 2014 after subtracting dividend payments, according to the government.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans, which are worth more than $5 trillion. Along with several federal agencies, they backed nearly 90% of new mortgages over the past year.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.

For more, see Fannie Mae Posts $2.2B Net Gain for Q2 by The Associated Press, August 8, 2012 at NYTimes.com.