By Peter Ricci
Mortgage giant Fannie Mae released the findings of its second-quarter financial report earlier today, highlighting its net income, loan volumes and, naturally, its continuing health in the recovering mortgage markets.
Overall, the GSE reported a net income of $5.1 billion for 2012’s second quarter, up from $2.7 billion in the first quarter. More importantly, the firm’s comprehensive second quarter income – a hefty $5.4 billion – is enough to cover its $2.9 billion dividend to the Treasury; so for the second quarter in a row, Fannie did not need taxpayer funds!
Brightening View on Home Mortgage Lending
Of course, the report featured many other goodies on the Fannie Mae news front, and since we’re so nice and charitable, we though we’d spotlight a few of them:
- The GSE’s net income for the first half of 2012 was $7.8 billion.
- Since 2009, Fannie has funded the mortgage market with approximately $2.7 trillion in liquidity, providing financing for 2.2 million home purchases and 8.1 million mortgage refinancings.
- Most encouraging, Fannie’s new, post-2009 single-family book of business now accounts for 59 percent of its single-family guaranty book of business – loans that are not only current, but profitable.
- As a results, its single-family serious delinquency rate has fallen each quarter the last two years, and is 35 percent lower than in 2010.
- Fannie also remains quite active on the REO front. It acquired 43,783 single-family REO properties in the second quarter, and disposed of 48,674.
The Future of Fannie Mae
Susan McFarland, Fannie’s executive vice president and chief financial officer, said the promising second quarter report was the result of a number of factors.
“We saw a confluence of positive factors in the second quarter, including improved home prices, improvement in REO sales execution, and a continued decline in our single-family serious delinquency rate” McFarland said.
What will be interesting, going forward, is what the government decides to do with Fannie. Earlier this year, the Treasury had set a deadline of Dec. 31, 2012 for drafting a plan on revamping the GSE system; if Fannie keeps doing this well, though, will those plans change?