U.S. mortgager Federal National Mortgage (OTC:FNMA) on Wednesday reported earnings of $2.2 billion in the quarter to June on better price realisations on homes and a decline in foreclosures. Shares of FNMA ended higher by 4.48% to $0.303 on Wednesday, well off session high of $0.34. The stock ahs moved up over 30% in the past one week.
This is the second quarterly gain the company has recorded since it was taken over by the U.S. government in the wake of the sub-prime mortgage crisis that rocked the country in 2008.
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The company's net income to shareholders was at 37 cents share in the quarter compared to a loss of $5.2 billion or 90 cents a share in the same period of the previous year.
It may be recalled that the company had posted a net income of $2.7 billion in the March quarter, its first after becoming a state-owned entity.
In the June quarter it paid dividend of $2.9 billion to the Treasury Department compared to the $2.8 billion it paid in the March quarter. The mortgager has so far repaid $26 billion of the $116 bailout money it got from the U.S. Treasury Department.
U.S. home sales, which have never recovered since the bubble burst in late 2007, seem to be on the mend. Prices have started to improve and home sales are much better than they were a year earlier but still far below their peak levels.
Data analytics firm CoreLogic had said on Tuesday that home prices in the country had shown an increase of 2.5 percent in June compared to a year ago.
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On Tuesday, the other mortgager Freddie Mac had reported net income of $1.2 billion in the second quarter compared to a loss of $3.76 billion a year earlier.
Fannie Mae and Freddie Mac between them have about half of the U.S. mortgage market.