US mortgage giant up-ends fortunes through housing gains

Chief executive Donald Layton says property market ‘turned a corner’ New York – Arabstoday US mortgage finance giant Freddie Mac has posted an $11bn annual profit for 2012, compared to a loss of $5.3bn a year earlier. The government-controlled company, bailed out during the 2008 financial crisis, also reported $4.5bn in net income for the fourth quarter of last year, up from $2.9bn in the third quarter.
"It's clear from our earnings that the housing market has turned a corner and that our work to minimise legacy losses and build a strong new book of business is paying off," Freddie Mac chief executive Donald Layton said in a statement on Thursday.
Provision for credit losses for 2012 fell to $1.9bn from $10.7bn for 2011, the company said.
"The improvement in both the fourth quarter and full-year 2012 is driven by a decrease in the volume of newly delinquent single-family loans and the positive impact of increased national home prices," it said.
Freddie Mac and sister institution Fannie Mae were rescued by the government from the brink of bankruptcy in September 2008 after the housing bubble collapsed.
The two were put under government control as their home-loan losses surged and given a $180bn bailout.
Freddie Mac said that, through December 31, it had paid $23.8bn in cash dividends to the US Treasury.