(CNNMoney) -- Mortgage backer Fannie Mae reported the best quarterly results since the housing bubble burst five years ago, saying it did not need additional billions in tax funds for the quarter and that it believes losses on past mortgages peaked at the end of last year.
The company also reported just enough profit in the three months ended March 31 to cover its latest payment to the Treasury Department, and predicted better profits ahead.
Fannie attributed the better results to a slowing in the decline in home prices, a drop in its inventory of foreclosed homes and better sale prices for the foreclosed homes it sold.
"We expect our financial results for 2012 to be significantly better than 2011," said Susan McFarland, Fannie's chief financial officer, in the earnings statement released Wednesday.
There have been numerous signs of improvement in the long-battered housing market in recent months, as record-low mortgage rates, low home prices and lower unemployment have helped to draw home buyers back into the market. But the large supply of foreclosed homes for sale have continued to depress home prices.
Fannie and Freddie provide most of funds used for U.S. home mortgages, as they purchase and bundle loans made by banks and other lenders, attach loan guarantees, and then sell or hold securities backed by those mortgages. As of March 31, the two companies guaranteed $3.06 trillion in home loans.
