Fannie Mae reported $2 billion in net income and $2.2 billion in comprehensive income for the third quarter, a profit but still a hefty drop from the second quarter’s net income of $4.6 billion and comprehensive income of $4.4 billion.
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On November 3, Freddie Mac reported its first loss for a quarter since 2011 mostly from hedges in accounting against the risk in interest rates. The mortgage buyer logged a $475 million loss, which it blamed on interest rate declines.
“I am proud of Fannie Mae’s leadership in bringing positive change to the housing finance system”, Mayopoulos said.
The political reality is that Fannie Mae and Freddie Mac can’t be recapitalized and released from their now seven-year-old conservatorships.
Prior to the bailout, government-sponsored enterprises (GSE) Fannie and Freddie functioned as privately owned companies that were chartered by the government.
Fannie Mae recognized a provision for federal income taxes of $1.1 billion for the third quarter of 2015, reflecting an effective tax rate of 35 percent.
Also during Q3, Fannie Mae continued to reduce taxpayer risk and increase the role of private capital in the mortgage market through its Connecticut Avenue Securities (CAS) and Credit Insurance Risk Transfer (CIRT) transactions. “We won’t have a cushion of any size to operate with”.
In the third quarter of 2015, Fannie Mae provided $132 billion in liquidity to the mortgage market, helping families buy, refinance, or rent homes.
The company, which along with Freddie Mac its smaller rival, was seized during the financial crisis of 2008 and will have now returned $144.8 billion worth of dividends to the US government according to a Thursday regulatory filing.
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The company reported a loss of $500,000 for the quarter. “This isn’t an issue that Washington is ignorant of; it’s just a matter of whether or not they want to address it”, he said.
