Freddie Mac reports that it raked in $5 billion in the second quarter, the seventh straight profitable quarter for the government-sponsored enterprise (GSE) and the second largest in its history.
Most of the earnings were attributed to increased profits from investments made to hedge against rising interest rates, the firm said. That helped offset losses on mortgages during the quarter.
The GSE, which has a net worth of $7.4 billion, will pay a dividend of $4.4 billion to the U.S. Treasury next month and is requesting no draw.
The firm's net income for the first quarter was $4.6 billion.
Freddie Mac and larger sibling Fannie Mae have so far paid back $136 billion of the $187 billion in government bailouts they received as a result of the 2008 financial crisis. Both firms became profitable last year and have been posting record revenue since the housing turnaround began in the fourth quarter of 2012.
Once its second-quarter dividend is paid, Freddie Mac will have repaid $41.4 billion of the roughly $71.3 billion it received from taxpayers.
Since Jan 1, 2009, when it was placed under the conservatorship of the Federal Housing Finance Agency, Freddie Mac has provided $2 trillion of liquidity to the mortgage market that funded 7.2 million refinancings, more than 1 million of which came in the first half of this year, 1.8 million home purchases and 1.4 million units of multifamily rental housing.
In addition the GSE has helped approximately 872,000 borrowers to avoid foreclosure, including 87,000 in the first half.
In July 2013, Freddie Mac executed a $500 million transaction (STACR) that transfers a portion of the credit risk on single-family mortgages to private investors, thus reducing taxpayer risk.
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