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The nation's second largest mortgage company reported Wednesday that it pulled in net income of $676 million during the first three months of this year.
[IMAGE]""Freddie Mac"":http://www.freddiemac.com closed the quarter with positive net worth of $1.2 billion. As a result, no additional funding from Treasury was required for the first quarter of 2011.
It's the first time since the fourth quarter of 2009 that the company has not needed to draw on taxpayer support to cover a deficit.
Over the 2010 fiscal year, Freddie received $13 billion in taxpayer funding under the Treasury agreement put in place when the federal government seized control of the mortgage financier.
Since the conservatorship began in September 2008, Freddie Mac has drawn a total of $64.7 billion. The bulk of that -- $45.6 billion â€"" came at the onset of the conservatorship during the 2008 fiscal year.
On that nearly $65 billion in draws from Treasury, the GSE has paid a total of $11.6 billion in dividends, $1.6 billion of which was paid during the first three months of this year.
In recent quarters, it's become a case of robbing Peter to pay Paul. For example, during the fourth quarter of 2010, Freddie Mac paid dividends to Treasury of $1.6 billion. The
[COLUMN_BREAK]GSE then turned around and requested a $500 million draw from Treasury to cover the deficit resulting from the dividend payment.
But this quarter, Freddie came out ahead even after another hefty dividend payout, posting its first quarterly profit since the second quarter of 2009.
Still, the McLean, Virginia-based GSE said in its ""latest earnings report"":http://www.freddiemac.com/investors/er/pdf/2011er-1q11_release.pdf that financial results for the first quarter of 2011 continued to be impacted by weakness in the U.S. mortgage and credit markets.
The company noted that during the first quarter of 2011, home prices decreased by an estimated 2.8 percent nationwide, based on the company's own index of its single-family credit guarantee portfolio. In addition, long-term interest rates increased by approximately 17 basis points.
The GSE, though, is seeing improvement on the default front. Freddie says new single-family business acquired in 2009, 2010, and 2011 continues to demonstrate strong credit quality based on borrower credit scores and loan-to-value ratios at origination.
In addition, the GSE's single-family serious delinquency rate dropped to 3.63 percent at March 31, 2011, compared to 3.84 percent at December 31, 2010, and remains below industry benchmarks.
Freddie's foreclosure prevention efforts helped more than 62,000 borrowers avoid foreclosure in the first quarter of 2011, and REO dispositions reached record levels in the first quarter with approximately 30,000 homes sold â€"" two-thirds of which went to owner-occupants.
""Our outlook remains cautious,"" said Freddie Mac CEO Charles E. Haldeman, Jr. ""Continued improvements on the employment front and in early-stage delinquencies were positive signs during the quarter, but we believe large inventories of unsold homes and a high number of distressed sales will continue to put downward pressure on home prices in many neighborhoods.""
