Freddie Mac to pay U.S. $30.4 billion, offsetting bailout cost
WASHINGTON -- Freddie Mac, the mortgage finance firm seized by the government in 2008 along with sibling Fannie Mae, will pay the Treasury $30.4 billion in dividends after posting a third-quarter profit and will have more than offset its bailout costs, the company said Thursday.
The huge upcoming payment, made possible because of a recalculation of the tax write-down it can take on its assets, means Freddie’s will have paid the Treasury Department $71.345 billion in dividends, the company said.
Freddie has received $71.336 billion in taxpayer assistance and none since early 2012 as the housing market has recovered.
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Under terms of the bailout, dividend payments by Freddie and Fannie don’t reduce the amount owed to taxpayers for the bailout. But the payments, made possible because of the improving housing market, offset the bottom-line costs to the government.
Freddie reported a $6.5-billion profit in the July-September period, the company’s eighth-straight quarterly profit. The company had a $4.9-billion profit in the second quarter.
The government seized Fannie and Freddie to prevent their collapse as losses piled up from bad loans the companies bought and guaranteed during the subprime housing boom.
Combined, the two companies have received about $187.5 billion in bailout money, though none since early 2012. With third-quarter dividend payments, they would have paid the government about $185.3 billion.
Fannie Mae on Thursday reported an $8.7-billion third-quarter profit and said it would pay the Treasury $8.6 billion in dividends. The company received $116.1 billion in taxpayer assistance and will have paid about $114 billion in dividends.
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