The full year results for the largest provider of housing finance, Fannie Mae, are out this morning, showing a fifth year of profits.
And, one of the larger shifts this quarter, although profits remain flat, is earnings from guarantee-fees now outpace portfolio investments. In other words, Fannie Mae is now making more money off of business it is doing rather than business it once did.
While the accounting rules shift to incorporate those portfolio assets from held-for-investment to held-for-sales, don’t expect monumental changes to g-fees.
“I don’t expect significant changes to pricing,” Timothy Mayopoulos, president and CEO said in a call to HousingWire. “G-fees are a much more stable, reliable and predictable set of revenues. It is in the right zone [pricing-wise].”
[Read more about g-fee news by clicking here.]
Fannie Mae Chief Financial Officer David Benson also provided a bit of background on other fees the government-sponsored enterprise used to charge for using its services, such as Early Check. While Friday's earning report mentions the elimination of those fees and the impact on profits, Benson clarified that it’s only a blip.
Doing the quick math, Benson estimates those fees only provided around $200 million annually to Fannie Mae.
Mayopoulos said it makes good customer service to eliminate the fees and even joked that he had yet to hear one complaint about offering the services for free.
“These kinds of tools should be the future of housing finance,” he said, adding that offering them for free is “an important public service.”