Northern, WI 05/09/2013 (indicesmedia) – With the home prices in United States soaring since May 2006, Freddie Mac (OBB:FMCC) (Closed: $0.880, Up by 7.58%) had registered a net income of $4.6 billion for the first quarter of 2013. As the company is presently under federal conservatorship, Freddie Mac (OBB:FMCC) will now pay $7 billion to the Treasury Department in return for the financial aids.
Conservatorship Of Freddie Mac (OBB:FMCC) And Fannie Mae (OBB:FNMA)
Freddie Mac (OBB:FMCC) and Fannie Mae (OBB:FNMA) (Closed: $0.901, Up by 9.88%) are companies which purchase the mortgaged home loans from lenders, pack them into securities and offer to investors for public trading. These companies guarantee payments of principal and interest on such mortgaged securities. The recession in United States due to deep fall in the house prices led the two companies to be taken under federal conservatorship with financial aid. Freddie Mac (OBB:FMCC) has received $72 billion financial aid from the Treasury department of US, due to which the company has to send back anything above $3 billion in net worth of its balance sheet.
The climbing prices of houses in United States at the fastest pace had led to huge profits in the balance sheets of Fannie Mae (OBB:FNMA) and Freddie Mac (OBB:FMCC). The two mortgage securities based companies are now repaying their financial aid to the Treasury Department in every way possible. It had been estimated that by 2023, these payments from the two companies would exceed the financial aid they received by $51 billion.
Freddie Mac (OBB:FMCC) is consistently on the lookout to improve the fundamentals of the company so as to tap the housing recovery in all possible ways. Further policies from the government on ways to reform the mortgage finance system also add to the prospects of Freddie Mac (OBB:FMCC).