Mortgage giant Fannie Mae earned $7.6 billion from October through December, the biggest quarterly profit in its history. The gain was driven by an improving housing market that has lifted home prices and a $3.6 billion legal settlement with Bank of America.

The government-controlled company sought no additional federal aid.

For all of 2012, Fannie says it earned $17.2 billion and paid dividends of $11.6 billion to the U.S. Treasury. The company says it expects to remain profitable "for the foreseeable future."

Taxpayers spent $116 billion to rescue Fannie during the financial crisis. The company has so far paid back $35.6 billion.

Fannie also said in its return that is expects to cash in on certain "deferred tax assets" held by the company as early as the first quarter of this year.

A deferred tax asset is an accounting device that accrues when a company records a yearly loss, and chooses to put off using that loss to reduce some of its tax liabilities until it returns to profitability. Fannie’s deferred tax assets amount to $59.8 billion.

"If and when Fannie Mae does release the valuation allowance on its deferred tax assets, it will be included as income in that period and will result in a corresponding increase in the company’s net worth as of the end of that period. Accordingly, Fannie Mae expects to pay Treasury a significant dividend in the quarter following a release of the valuation allowance on the company’s deferred tax assets," the firm said in a statement.