Freedie Mac offset the bailout cost and pays $30.4 billion
WASHINGTON: In 2008, government seized the firm Freddie Mac that deals with mortgage finance. The company along with its sibling firm Fannie Mae is all set to pay $30.4 billion treasury dividends and offset the bailout costs.
According to the Company it is tax write-down recalculation made on the assets that made the upcoming huge payment possible in dividends. With this the company can make a payment of $71.345 billion to the “Treasury Department”.
In the taxpayer assistance the company received an amount of $71.336 billion. But none has been recovered since 2012 as housing market.
In the terms of bailout it is clearly mentioned that the dividend payments that Freddie Mac and Fannie Mae are going to make cannot be reduced. With the improvement happened in the housing market the payments have become possible. This offsets bottom-line costs payable to government.
According to the report given by Freddie, the company made a profit of $6.5 billion in its eight-quarterly profit of July-September period. In its second quarter the company made a profit of $4.9 billion.
In combination the two companies received bailout money of $187.5 billion. With the dividend payments of Third Quarter the company would make a payment of $185.3 billion to the Government.
According to Fannie Mae’s report on Thursday, with the profit of third quarter i.e., $8.7 billion the company would pay $8.6 billion for the Treasury dividends. The company from the taxpayer assistance received an amount of $116.1 billion and would pay about an amount of $114 billion towards the dividends.