Fannie Mae repayments exceed bailout

WASHINGTON — On Friday, Fannie Mae passed a milestone years in the making. The District of Columbia-based mortgage giant announced that by next month it will have sent the Treasury more than it received from a taxpayerfunded bailout.

Fannie reported that it will pay the government $7.2 billion in March. With that payment, the company will have sent $121 billion in dividends to the government — compared with the $116 billion it requested from the Treasury.

“I’m very, very happy for the taxpayer,” Tim Mayopoulos, Fannie’s chief executive, said in a call with reporters.

Going into the housing crisis, Fannie and rival Freddie Mac were publicly traded companies. But the market assumed that the government would step in if there were extraordinary losses, and it did. The government took control of the companies in 2008 and has since given them $188 billion in bailout money.

With Fannie’s latest payout, the government will have recouped all of its investment. McLean, Va.based Freddie sent the Treasury $71.34 billion in dividends by the end of last year, about $9 million more than it drew from the government.

Unlike other companies that received federal support during the financial crisis, Fannie and Freddie were required to enter into a preferred-stock program with the government. Each company drew money from the Treasury as need- ed to maintain a positive net worth. In return, the Treasury received dividends.

Eventually, each institution turned a solid profit. On Friday, Fannie reported net income of $84 billion for the year and $6.5 billion in the fourth quarter, its eighth consecutive quarterly profit.

Despite the turnaround, some congressional lawmakers have been clamoring to shutter the companies, and President Barack Obama has publicly called for an end to the two institutions. Even in 2008, top government officials did not envision that the firms would ever go back to business as usual. Both were widely blamed for exacerbating the financial crisis by buying millions of dollars in risky loans and passing on the risk to taxpayers.