Freddie Mac put up its strongest numbers in six years in 2012, posting impressive quarterly and yearly profits.

Well, it finally happened.

After six years of jaw-dropping losses, many of them in the tens of billions of dollars, embattled GSE Freddie Mac has emerged victorious in 2012, riding the wave of the housing recovery and reporting its first annual gain since 2006.

For 2012, Freddie reported an $11 billion profit; with a fourth-quarter profit of $4.5 billion, Freddie has now boasted five consecutive quarters of profits, a dramatic turnaround for a company that that reported a $5.3 billion loss just a year ago. In fact, between 2008 and 2011, Freddie lost more than $90 billion.

Freddie Mac Profitable in 2012

So how to explain Freddie’s sudden reversal of fortune? As we hinted earlier, the lion share of credit goes to the housing market, which underwent a dramatic turnaround in 2012, with both home sales and home prices showing their strongest activity in years.

Also, as the Wall Street Journal noted, after the government took full ownership of Freddie in 2008, Freddie’s lending standards and the fees it charged lenders also rose; and Freddie’s market share remains immense, with it and Fannie Mae backing nearly two-thirds of all the nation’s mortgages, mortgages that are much more stable than those insured by the GSEs during the housing boom.

Donald Layton, Freddie’s chief executive officer, said in a statement that the company’s 2012 earnings demonstrated a new future.

“It’s clear from our earnings that the housing market has turned a corner, and that our work to minimize legacy losses and build a strong new book of business is paying off,” Layton said.

What is the Future for Freddie Mac?

Any discussions of the future regarding Freddie Mac, though, are ripe with contradictions and ambiguities.

For one, there are the dividend payments that Freddie is still required to make to the Treasury. Freddie has received $71.3 billion in taxpayer support, and has thus far paid out $29.6 billion in dividends. In March, though, Freddie will make a $5.8 billion dividend payment, and now that the company is profitable, Freddie will be taking all of its profits as payment, which could lead to a faster closure on Freddie’s debts.

However, as Jim Vogel, an analyst at FTN Financial, explained to the Journal, it’s uncertain that Freddie could sustain its 2012 performance, considering that part of the condition of Freddie’s taxpayer bailout was that it reduce the size of its mortgage portfolio – the one part of its business that is generating most of its profits.

Just last week, we asked whether GSE reform would ever take place; with Freddie, and presumably Fannie Mae (it’s 2012 numbers are due out soon), putting up stronger and stronger numbers, does the likelihood of reform grow slimmer?