May 8, 2014 / 12:16 PM / 4 years ago

UPDATE 1-Fannie Mae to pay US Treasury $5.7 billion on quarterly profit

(Adds background on Fannie Mae)

WASHINGTON, May 8 (Reuters) - Government-controlled mortgage finance firm Fannie Mae said on Thursday it would send the U.S. Treasury a dividend of $5.7 billion after posting a ninth straight quarterly profit.

Once it has made the latest payment in June, it will have returned $126.8 billion to taxpayers in return for the $116.1 billion in aid it received after being placed under the government’s wing at the height of the financial crisis.

The company, the nation’s largest source of mortgage funds, earned a net income of $5.3 billion during the first three months of the year, down from $8.1 billion in the year-ago quarter.

Fannie Mae cited revenue from litigation related to mortgage-backed securities and a steady income from fees they charge lenders to guarantee loans for the performance.

Fannie Mae and rival Freddie Mac, which own or guarantee 60 percent of all U.S. home loans, were placed in conservatorship in September 2008 as soured loans threatened their solvency.

Under their bailout terms, they must turn their profits over to the Treasury as dividends on the controlling stake the government took when it seized them. They cannot repurchase the government’s share. (Reporting By Margaret Chadbourn; Editing by W Simon and Chizu Nomiyama)

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