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August 08, 2012

Freddie Mac shows 2Q profit

MCLEAN, Va. (UPI) -- U.S. mortgage buyer Freddie Mac reported a $3.02 billion second quarter profit, as rising home prices helped ease the need to seek more government funding.

The latest quarterly mark is the fifth time since 2008 that the Federal Home Loan Mortgage Corp. didn't ask for financial assistance to stay solvent -- and it still paid a $1.8 billion dividend to the U.S. Treasury, The Wall Street Journal reported Tuesday.

Freddie Mac, which has headquarters in McLean, Va., and sister company Fannie Mae -- Federal National Mortgage Association -- don't lend to consumers but buy mortgages on the secondary market, pools them, then sells them as a mortgage-backed security to investors on the open market, increasing the supply of money available for mortgage lending and increases the money available for new home purchases.

Both Fannie Mae and Freddie Mac have relied on government assistance to carry on their operations since being put into conservatorship in 2008.

Freddie Mac's second quarter profit compared with a $2.14 billion loss in the second quarter a year ago. Officials said the improved performance was pushed mainly by a smaller provision for credit losses and a reduction in derivative losses.

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