Fannie Mae and Freddie Mac – in conservatorship for almost eight years now – posted combined net income of $3.94 billion for the second quarter, with an assist from higher guaranty fee income and a noticeable decline in hedging charges. Fannie’s profit was $2.9 billion for the second quarter, more than double the $1.1 billion reported last quarter. The GSE attributed the increase in net income to lower fair value losses in the quarter, coupled with high credit-related income due to home price increases and interest rate decreases. Higher net revenues driven by increased mortgage prepayments also helped. Fannie booked $3.26 billion of guaranty fee income in 2Q16, compared to $3.22 billion in the first quarter.
The Federal Home Loan Bank System witnessed a quarterly drop in earnings, but posted an 11.6 percent jump in advances in the second quarter as lenders ramped up mortgage originations. The combined net income was $792 million in the second quarter of 2016. That number is down from the $825 million in the previous quarter. The report noted that the 12-month increase was mostly due to ...
The multifamily market continued to stay strong in the first half of 2016, despite a slowdown in origination volume. GSE multifamily business soared with record volumes in 2015 when lending reached $90 billion. Freddie Mac said steady economic growth and key drivers will keep the multifamily market moving forward through the remainder of 2016 and into next year. In its mid-year multifamily outlook, the mortgage giant noted that origination volume will have another record year in 2016, thanks to increasing property prices, new completions and maturities. Although fundamentals moderated some in the first half of the year, Freddie said they won’t decelerate enough to derail the multifamily industry because demand remains robust.
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