Freddie Mac Post Big Profits

WASHINGTON (AP) — Mortgage giant Freddie Mac reported net income of $1.7 billion for the second quarter, up from the same period of 2016.

The government-controlled company said Tuesday its earnings were boosted by increased income from fees paid by lenders for guaranteeing mortgages in the April-through-June period.

Freddie, based in McLean, Virginia, will pay a dividend of $2 billion to the U.S. Treasury next month. Freddie will have paid a total $110.2 billion in dividends, exceeding its government bailout of $71 billion.

The government rescued Freddie and larger sibling Fannie Mae at the height of the financial crisis in September 2008, after they suffered huge losses from risky mortgages in the housing market bust.

Together the companies received taxpayer aid totaling about $187 billion. The housing market’s gradual recovery, helped by record-low interest rates spurring home purchases, has made Freddie and Fannie profitable again.

Still, the housing market’s revival has been choppy, and it has lagged behind the rest of the economy. Despite the low borrowing rates that could lure prospective homebuyers, the market has remained hampered by tight mortgage credit, rising home prices and stagnating incomes.