Freddie Mac (FMCC.OB), the No. 2 provider of U.S. mortgage money, posted its second-largest quarterly profit in company history in the first quarter due to rising home prices, falling mortgage delinquencies and increased refinance activity.

For the first three months of the year, the government-controlled company on Wednesday reported net income of $4.6 billion, up from $577 million in the year-ago quarter. It was the company's sixth straight quarter of profits, and the largest since a $5.7 billion gain in the third quarter of 2002. [...]

It said it would face another $7 billion payment in June based on its current net worth, and suggested it could record gains in the second quarter on billions of dollars worth of assets it had written down, leading to an even bigger payment. "The strong rebound in the housing market of which we're all aware continues to be reflected in our excellent financial performance," Freddie Mac Chief Executive Officer Donald Layton told reporters on a conference call. "We expect that the housing recovery will continue to bolster our financial performance."