Fannie Mae and Freddie Mac reported significant profits during the fourth quarter of 2013, capping a year in which rising guaranty fees had little impact on the market share of the two government-sponsored enterprises. Fannie reported net income for 2013 of $84.0 billion, compared to $17.2 billion in 2012, but over half of last year's earnings (roughly $45 billion) came from recaptured deferred tax assets. The company reported fourth-quarter earnings of $6.5 billion, its eighth consecutive quarterly profit. After it makes its next dividend payment to the Treasury Department in March, Fannie will have paid...
In a heavily redacted draft memo released to the public, the Inspector General of FHFA found that while the agency had reviewed and examined the GSEs’ executive compensation, it did not keep close tabs on "non-executive senior professional compensation practices."
Bank and thrift MBS holdings fell by 4.6 percent during 2013, and by the end of the year, they were down 7.8 percent from the all-time high of $1.634 trillion reached at the end of March 2012.
The capital markets risk-sharing transactions completed by Fannie Mae and Freddie Mac in the past year are seen by some as a model for reform of the government-sponsored enterprises. However, the GSEs are taking on significantly more risk in the transactions than the non-agency first-loss requirements contemplated in legislation pending in Congress. Analysts at Barclays Capital project that after Congress approves mortgage-finance reform legislation, it would take at least 10 years to transition smoothly to a new system. Bills in Congress contemplate a five-year transition timeline, but raising enough private capital to fund the new system in that timeframe could be difficult. Industry analysts predict...
The GSE chief credited Fannie’s strong performance to a wide array of factors, including improving home prices and lower delinquencies, but also tighter underwriting standards which have created a pristine book of business for the company.
In what’s claimed to be the third-largest settlement of a class-action suit by investors in non-agency MBS, Royal Bank of Scotland agreed to pay $275 million in cash. Investors led by the New Jersey Carpenters Vacation Fund claimed that RBS did not disclose that loans included in Harborview MBS that it sold failed to meet the deals’ underwriting guidelines. The settlement is awaiting approval by U.S. District Judge Harold Baer in U.S. District Court for the Southern District of New York. Separately, the remains of Lehman Brothers settled...
Although some regulators have anxiety problems with nonbank servicers, Fannie Mae apparently does not. Meanwhile, a large mortgage vendor M&A deal could be revealed late Friday.
Fannie Mae reported net earnings of $6.5 billion in the fourth quarter late this week, revealing that the company’s total dividend payments to the U.S. Treasury will exceed the $116.1 billion that the GSE has drawn since being put into conservatorship in late 2008. The company will pay the Treasury $7.2 billion in dividends in March. With the March dividend payment, Fannie will have paid a total of $121.1 billion in dividends to the Treasury – the equivalent amount of its entire draw plus an additional $5.0 billion.
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