Fannie, Freddie send Treasury $6.8 billion in Q3 profits

Housing giant Fannie Mae will send another $4 billion to the Treasury Department after posting a solid profit in the third quarter.

The government-sponsored enterprise reported Thursday that its profits were up slightly from the second quarter, but down significantly from the same time in 2013, when it sent $8.6 billion in gains to the Treasury.

{mosads}Fannie’s smaller counterpart, Freddie Mac, also reported a third quarter profit and plans to send the government $2.8 billion in funds.

The two enterprises have been on a government lifeline since they almost collapsed during the subprime mortgage crisis of 2008. Under the terms of their rescue, the two agencies are required to send all profits to the Treasury Department.

As the housing market has come back from that extreme downturn, the two enterprises have again returned to profitability.

The amount the two have doled out to the government has since exceeded the amount they required in the rescue. Fannie has sent the government $134.5 billion in dividend payments compared to $116.1 billion in draws, and Freddie has sent $91 billion compared to $72.3 billion in rescue funds.

However, the money the two enterprises give to the government does not wind down that investment, and both Democrats and Republicans agree that the two will eventually have to be wound down and the nation’s mortgage market completely reworked.

While there is broad agreement on the need for housing finance reform in Washington, making progress has proven difficult. Lawmakers in both the House and Senate took a run at crafting a comprehensive overhaul packages over the last two years, but both efforts fizzled with little to show for it.

And now the effort will get a new face, as the next Congress will come with a GOP-controlled Senate. Sen. Richard Shelby (R-Ala.) is widely expected to take over the Banking Committee that will steer a housing overhaul package, and he will be working with Rep. Jeb Hensarling (R-Texas), who will again chair the House Financial Services Committee.