07-20-2017  5:49 pm      •     
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NEWS BRIEFS

Northeast Portland Sunday Parkways

This summer the eight-mile bike route takes place on July 23, from 11 a.m - 4 p.m. ...

APANO: Cultural Series Launches with Solidarity Film Screening

"American Revolutionary: The Evolution of Grace Lee Boggs" screens on July 25 at North Portland Library ...

National Hunger Hotline Seeks to Reach More Children in Need

Callers can locate summer meals sites for kids, food pantries, and other meals programs near them ...

ICS Announces New Executive Director

Lisa LeSage has been named the new Executive Director of Immigration Counseling Service ...

U.S. & WORLD NEWS

OPINION

Throw the Doors of Opportunity Wide Open for Our Youth

Congressional Black Caucus member Robin Kelly says it’s time to pass the “Today’s American Dream Act.” ...

Trump’s Proposed Budget Cuts Threaten Civil Rights

Charlene Crowell of the Center for Responsible Lending talks about the impact of President Trump’s budget on civil rights...

Nooses on National Mall Echo Domestic Terrorism

Lauren Victoria Burke reports on a series of domestic terrorist attacks across the U.S ...

White House Proposes $9.2 Billion Cut in Education Funding

Charlene Crowell of the Center for Responsible Lending writes about the rising costs of higher education ...

AFRICAN AMERICANS IN THE NEWS

ENTERTAINMENT

NEW YORK (CNNMoney) -- Mortgage financing giant Fannie Mae Tuesday reported a record profit of $17.2 billion for 2012, a testament to how much the housing market has improved lately.

Just four years ago, the government had to step in and take control of Fannie Mae, which was brought down to its knees by deep losses from foreclosures and plunging home prices after the real estate bubble had burst.

It was the first full year profit reported by the company since 2006, and marked a significant turnaround from the $16.9 billion loss it posted for 2011.

It also means that Fannie Mae is poised to pay tens of billions of dollars in additional dividends to the U.S. Treasury, perhaps as soon as this quarter, in what could turn out to be its largest repayment to date. The government has pumped in $116 billion in bailout funds in its rescue of the company.

Fannie's improvement in results stems directly from a sharp drop in losses on its loan portfolio. That's because of the decline in foreclosures and delinquencies on the mortgages it owns or guarantees.

The company said it expects its "earnings to remain strong over the next few years."

The housing market has enjoyed a significant recovery in the past year, as low mortgage rates and a tight supply of homes has combined to drive up home prices and sales.

A settlement payout from Bank of America also raised Fannie's 2012 pre-tax income by $1.3 billion. Bank of America agreed to pay the mortgage financier $3.6 billion as part of a settlement over risky mortgages that Countrywide Financial sold Fannie during the housing bubble. Countrywide was subsequently bought by Bank of America.

The 2012 profit was more than twice the company's previous record of $8.1 billion in 2003, at a time when the housing bubble was just starting to inflate. Fannie's $7.6 billion profit in the final three months of the year also represented its best quarter on record.

Any improvement in Fannie's results is particularly good news for taxpayers. Fannie pays dividends to the Treasury on shares that the government owns. Dividend payments totaled $11.6 billion in 2012 and $4 billion so far in 2013, bringing the total of its Treasury payments to $35.6 billion.

Another reason taxpayers should be happy about Fannie Mae's profitability is that it opens the way for the company to use an accounting treatment to reinstate past tax credits worth $59.8 billion in its balance sheet, which it can use to repay the government.

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