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Record Fannie Mae Profits Continue Amid GSE Debate
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

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