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Fannie Mae reveals record profits

US federal mortgage agency Fannie Mae has confirmed it will pay $59.4 billion in dividends to the US Treasury, after posting a record profit in the first quarter of 2013.

Fannie Mae and Freddie Mac were bailed out by the US government after the financial crisis occurred in 2008.

As the crisis wore on, Fannie received tax benefits on the bad loans it was forced to absorb and has now decided to capitalise on them.

The mortgage agency recorded $58.7 billion net profit, which represents a huge gain of $50.6 billion from reversing an earlier writedown of tax benefits. The company only made a profit of $2.7 billion in the same period of 2012.

In a statement the firm said: "After evaluating the recoverability of Fannie Mae's deferred tax assets, as of 31 March 2013, the company determined that the factors in favour of releasing the allowance outweighed the factors in favour of maintaining it."

By Claire Archer