GSEs Report Q2 Earnings

August 3, 2017
Fannie Mae reported net income of $3.2 billion in the second quarter, up from $2.8 billion in the first quarter
Fannie Mae reported net income of $3.2 billion in the second quarter, up from $2.8 billion in the first quarter. The government-sponsored enterprise (GSE) attributed its performance to an increase in credit-related income and a shift to investment gains in the second quarter from investment losses in the first quarter.
 
Fannie Mae also reported second quarter net revenues of $5.4 billion, a drop from $5.6 billion in the first quarter, and net interest income of $5 billion for the second quarter, compared with $5.3 billion for the first quarter. The GSE stated the decrease in net interest income was due to lower guaranty fee income as a result of lower amortization income. The GSE reported a positive net worth of $3.7 billion as of June 30, adding that it will the Department of the Treasury a $3.1 billion dividend in September if the Federal Housing Finance Agency (FHFA) declares a dividend in this amount.
 
“Our results reflect the strength of our business model and the momentum of our strategy,” said Timothy J. Mayopoulos, President and CEO. “We are focused on helping lenders save time and money, making the mortgage process easier, and expanding access to credit in ways that make sense. We will continue to deliver innovative solutions that help our customers succeed, improve the mortgage process, and create safe and sustainable opportunities for families to own or rent a home.”
 
Earlier in the week, Freddie Mac reported second quarter reported net income of $1.66 billion, down from $2.21 billion in the first quarter. The GSE also reported comprehensive income of $2 billion for the second quarter, down from $2.2 billion for the first quarter. Despite these declines, Freddie Mac stated that it would pay the Department of the Treasury $2 billion dividend next month.
 
“Our continued very solid financial results and strong business fundamentals reflect the company’s transformation into a well-run commercial enterprise,” said CEO Donald H. Layton. “This transformation is enabling us to better deliver on the mission that is our purpose–to provide liquidity, stability and affordability to the American primary mortgage market.”

 
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