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Taxpayers Net Over $31 Billion From GSE Bailouts

Earnings at the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. were down as settlement proceeds diminished. Taxpayers have reaped a $31 billion return from their bailout of the two government-sponsored enterprises.

During the second quarter, Fannie said it was the largest single issuer of single-family mortgage-related securities in the secondary market with an estimated market share of 39 percent.

Its market share, however, has been steadily falling from 45 percent in the second quarter of last year.

Freddie reported its single-family purchases or issuances at $108 billion for the first-half 2014.

During the same period, Freddie’s multifamily purchases and guarantees were $7 billion.

Fannie said its single-family book of business was $2.86 trillion as of June 30 versus $2.88 trillion as of March 31.

The multifamily book was relatively unchanged at $0.198 trillion compared to $0.199 trillion three months earlier. Fannie said it owned or guaranteed around 20 percent of all outstanding debt on multifamily properties as of March 31.

Fannie’s income before federal income taxes retreated to $5.4 billion from the first quarter’s $7.9 billion and also diminished from $12.1 billion in the second-quarter 2013.

“Net income in the second quarter of 2014 declined compared with the first quarter of 2014, due primarily to a decline in the amount of income recognized by the company from settlement agreements related to private-label mortgage-related securities sold to Fannie Mae,” the Washington, D.C.-based company stated in the report. “This decline was partially offset by an increase in the company’s benefit for credit losses due primarily to higher home prices in the second quarter of 2014.”

Pre-tax income at Freddie tumbled to $2.0 billion from $5.8 billion three months earlier.

Freddie offered the same explanation as Fannie for its earnings decline.

A planned $3.7 billion payment next month by Fannie to the Treasury will bring total dividend payments since being thrust into conservatorship to $130.5 billion. Draws during that same period were $116.1 billion — netting taxpayers $14.4 from the bailout investment.

Freddie will be making a $1.9 billion dividend payment, bringing its total to $88.2 billion. Life-to-date Treasury draws at Freddie amount to $71.3 billion — leaving taxpayers with a $16.9 billion profit since entering conservatorship in 2008.

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