GSE Performance

Browse articles from all of our Newsletters related to GSE Performance.

May 8, 2015 - Inside The GSEs

FHFA Stress Test Shows Possible GSE Shortfall in a Future Crisis

The results of the Federal Housing Finance Agency’s annual stress test on the GSEs show that the duo could have up to a $157 billion shortfall in the event of another economic downturn. The test, conducted as part of a Dodd-Frank Act requirement, shows three hypothetical economic scenarios and gives information on a possible range of future financial results. The GSEs used their respective internal models to project their financial results based on the assumptions provided by the Federal Reserve and the FHFA. One of those scenarios is a “severely adverse” scenario showing how Fannie Mae and Freddie Mac would perform if home prices declined about 25 percent and the unemployment rate peaked at more than 10 percent.

May 8, 2015 - Inside The GSEs

GSEs Remain Profitable, G-Fees Drive Net Income in First Quarter

Fannie Mae and Freddie Mac reported continued profitability in the first quarter of 2015 with net earnings of $1.9 billion and $524 million respectively. Both GSEs have been profitable for at least 13 consecutive quarters, but Fannie's earnings were down from the $5.3 billion in the first quarter of last year. Fannie said one factor was a $1.9 billion derivative loss in the first quarter, which is a jump from the $1.2 billion derivative loss in the first quarter of 2014. Freddie reported $2.4 billion in losses from derivatives and noted in its earnings statement that $1.8 billion of the charges were related to fair value changes. “The company’s use of derivatives reduces exposure to interest-rate risk on an economic basis; however, this can....


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