Fannie Mae recorded a net income of $3.7 billion for the second quarter of 2014.

This is a drop compared to $5.3 billion in the first quarter of 2014, primarily due to a decline in the amount of income recognized from settlement agreements related to private-label mortgage-related securities sold to Fannie Mae.

Freddie Mac this morning also reported second quarter earnings.

However, this decline was partially offset by an increase in the company’s benefit for credit losses due primarily to higher home prices in the second quarter of 2014.

“An important takeaway is that this is the first quarter in the a long time that we did not have a big one time event such as a mortgage purchase resolution. This quarter gives you a good sense for a normalized environment for Fannie Mae,” Tim Mayopoulos, president and CEO, said on the earnings call. 

And looking ahead, Mayopoulos said, "It was our goal to resolve the vast majority of mortgage purchase resolutions we had in 2013, and we did that. We obviously have some private label securities cases pending for Fannie and Freddie Mac. But, as you have seen, many of those have been resolved. But most of these matters are behind Fannie Mae." 

Thursday's earnings report comes on the two-year anniversary of the “third amendment sweep” which obligated the GSEs – Fannie and Freddie (which also reported 2Q earnings Thursday) pay all of their future profits to the Treasury as dividends.

At the time of the third amendment, the U.S. Treasury had purchased $187.5 billion in senior preferred stock to prevent the GSEs from becoming insolvent. The GSEs were paying a 10 percent per year dividend on this stock, with the payment of dividends through 2011 funded by additional Treasury purchases of senior preferred stock.

In addition, the company posted a positive net worth of $6.1 billion as of June 30, 2014 and expects to pay $3.7 billion to Treasury in September 2014 as a dividend on the senior preferred stock.

With the expected September dividend payment, Fannie Mae will have paid a total of $130.5 billion in dividends to Treasury in comparison to $116.1 billion in draw requests since 2008. Dividend payments do not offset prior Treasury draws. 

The government-sponsored enterprise has funded the mortgage market with more than $4.2 trillion in liquidity since 2009, including approximately $96 billion in liquidity in the second quarter of 2014.