Freddie Mac, buoyed by the housing market's rebound and an improving economy, reported an $11 billion annual profit for 2012 on Thursday—its largest ever annual gain and first profitable year since 2006, the Wall Street Journal reported today. Freddie's profit compares with a year-earlier loss of $5.3 billion. The fortunes of Freddie and its larger sibling, Fannie Mae, have turned around as home prices have stabilized and mortgage delinquencies slowed. That has allowed the government-controlled companies to set aside less money for loan losses. Fannie Mae, which has yet to post its annual results, reported $9.6 billion in profit during the first three quarters of 2012. Both firms reported tens of billions of dollars in losses from 2007 until 2011, as falling home prices and rising mortgage delinquencies blew big holes in their balance sheets. Freddie, for example, lost more than $90 billion between 2008 and 2011. After they were taken over by the government in 2008, the companies tightened lending standards and boosted the fees they charge lenders. They currently are responsible for backing nearly two-thirds of mortgages, as private lenders remain skittish of holding on to loans.
