Fannie Mae posts record net income

Allowing bailed-out mortgage giants Fannie Mae and Freddie Mac to persist in their current form -- one that critics say helped bring down the financial system -- may be out of the question to most lawmakers.

But in a testament to the housing market's steady year-long trudge toward a recovery, the two "government-sponsored enterprises" (GSEs) have both reminded observers that they are more than just systemic liabilities: if the conditions are right, they can be money-making machines.

Today Fannie Mae reported annual net income of $17.2 billion in 2012, and $7.6 billion for the fourth quarter of 2012, the largest annual and quarterly net income in the company's history. The soaring net income contrasts sharply with 2011's net income, a loss of $16.9 billion that occurred as housing market conditions deteriorated.

The disclosure also comes about a month after Freddie Mac also reported eye-popping results, $11 billion for 2012 and $4.5 billion for the fourth quarter of 2012.

Fannie Mae said it paid $11.6 billion in dividends to taxpayers in 2012. That brings the total amount of money that it's paid back to the government to $35.6 billion. Taxpayers have sunk well over $100 billion into Fannie Mae and Freddie Mac to keep them afloat since they entered conservatorship when the government bailed them out in 2008.

Fannie Mae said the record net income is attributable to improving market conditions that include a decline in serious delinquency rates, increased home prices, higher sales prices on its foreclosures, and the settlement money Bank of America paid to the company for alleged underwriting malfeasance.