Net income at the enterprise totaled $8.6 billion in Q4, bringing total 2013 profits up to $48.7 billion. According to the company, full-year earnings were spurred by the ongoing housing recovery, legal settlements totaling $7.7 billion, and a tax benefit of $23.3 billion—meaning these levels of earnings won’t be sustainable over the long term.
For all of 2013, Freddie Mac reported providing liquidity for 1.6 million refinances; 515,000 home purchases; and 388,000 multifamily rental units. The company also reported nearly 168,000 total foreclosure avoidance actions, about half of which were loan modifications.
Freddie’s dividend payment to Treasury will come to $10.4 billion, bringing its total government payments up to $81.8 billion, well above the $71.3 billion the company received in its crisis-era bailout. Per the GSEs’ respective agreements with Treasury, each enterprise will continue to make payments despite having made taxpayers whole.
The latest earnings report comes one week after Fannie Mae revealed full-year earnings of $84 billion, including $6.5 billion in Q4. Like Freddie, Fannie benefited largely from one-time factors and “does not expect to repeat its 2013 financial results.”
The fourth-quarter reports create more questions regarding the government’s plan to reform housing finance and reduce its own role in the market. While policymakers have pushed on a few plans to wind down the GSEs and restore private liquidity, neither the House nor the Senate have moved the ball forward meaningfully on reform.
And with time running by on the 113th Congress, that chance may slip until next year, say former senators George Mitchell and Mel Martinez, who, as co-chairs for the Bipartisan Policy Center’s Housing Commission, were among the first last year to propose eliminating Fannie and Freddie in favor of the backstop of a “limited government guarantee.”
“While there are significant differences among the various reform approaches, these differences are not insurmountable,” the two write in a blog post for The Hill. “With the legislative clock ticking away, it would be unfortunate if all the momentum that has been generated for reform were squandered through inattention, lack of focus or broader politics.”