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GSEs Guarantee $1.3 Trillion in New Mortgages in 2012

Jun 13, 2013

The Federal Housing Finance Agency (FHFA) has released its annual Report to Congress, detailing the agency’s 2012 examinations of Fannie Mae, Freddie Mac (the Enterprises), the 12 Federal Home Loan Banks (FHLBanks), and the FHLBanks’ joint Office of Finance. In its fifth annual Report to Congress, FHFA deemed both Fannie Mae and Freddie Mac “critical concerns” in 2012 but noted they each generated positive annual income for the first time since 2006. The 2012 Report to Congress also notes: ►Fannie Mae and Freddie Mac together guaranteed $1.3 trillion in new mortgages, representing 77 percent of all mortgages originated in 2012. ►Key challenges facing Fannie Mae and Freddie Mac include ongoing stress in the nation’s housing markets, the challenging economic environment, uncertainty regarding the longterm prospects of their operations and charters and the need to implement the FHFA Strategic Plan for Enterprise Conservatorships. ►Through year-end 2012, the cumulative draws on the U.S. Treasury from Fannie Mae and Freddie Mac totaled $187.5 billion and they have paid $55.1 billion in cash dividends to Treasury. FHFA noted that under the Senior Preferred Stock Purchase Agreements, the payment of dividends does not offset or pay down prior Treasury draws. ►Since the first quarter of the conservatorship in September 2008, Fannie Mae and Freddie Mac completed nearly 2.7 million actions to prevent foreclosures with more than half being loan modifications. ►Nearly 1.1 million homeowners refinanced through the Home Affordable Refinance Program (HARP) in 2012, bringing the total to 2.1 million since it began in April 2009. ►For the third consecutive year, all FHLBanks recorded positive annual earnings making 2012 the most profitable year since 2007. The FHLBanks ended 2012 with total assets of $763.1 billion, down less than one percent from 2011. ►All 12 FHLBanks met the minimum total regulatory capital requirements in 2012.
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