Closing Complex Loans Faster With a Digitized Client Workflow

Join us for a discussion on changes in market demographics, suppliers and how focusing on customer experience and a few simple steps during the mortgage loan process can close deals 3x faster.

engage.marketing event: All eyes on purchase

To help power your business forward, we’re bringing together the smartest minds in purchase mortgage marketing to share the insights, tactics and strategies that set leaders apart.

Home appraisal’s ugly history and uncertain future

This is Part I of a deep dive into the home appraisal industry. Today we explore the origins of the appraisal industry and its current lack of diversity.

The digital journey starts at acquisition

Investments in digital acquisition directly contribute to a lender’s ability to maximize future profitability and allow them to remain competitive. Download the white paper for a playbook to building a tech-enabled acquisition strategy for growth.

Investments

Fannie MaeÕ net income jumps to $4.6B in 2Q

Rising interest rates, home prices boost results

Fannie Mae reported net income of $4.6 billion for the second quarter of 2015 and comprehensive income of $4.4 billion.

The company reported a positive net worth of $6.2 billion as of June 30, 2015 resulting in a dividend obligation to Treasury of $4.4 billion, which the company expects to pay in September 2015.

Fannie Mae’s net income of $4.6 billion and comprehensive income of $4.4 billion for the second quarter of 2015 compares to net income of $1.9 billion and comprehensive income of $1.8 billion for the first quarter of 2015. Net income increased due primarily to fair value gains, partially offset by credit-related expense, in the second quarter of 2015.

The company’s financial results for the second quarter of 2015 were affected by an increase in interest rates. Although the increase in interest rates had a positive impact on the fair value of the company’s financial instruments, the increase in interest rates had a negative impact on its credit-related expense. The negative impact on credit-related expense was partially offset by an increase in home prices during the second quarter of 2015.

Also contributing to credit-related expense was the redesignation of certain nonperforming single-family loans from “held for investment” to “held for sale” in the second quarter of 2015. Fannie Mae recognized a provision for federal income taxes of $2.2 billion for the second quarter of 2015, reflecting an effective tax rate of 32%.

“We reported another strong quarter of financial performance with solid revenues and an impressive book of business that only continues to improve. We have reduced the risk of our business and have made great strides in transferring credit risk to private capital to better protect taxpayers,” said Timothy Mayopoulos, president and chief executive officer. “We are committed to serving our customers and the market with solutions that promote simplicity and certainty. We are creating revolutionary new tools, products, and solutions – and enhancing our existing foundational resources – to support our lenders. We continue to make changes throughout our company that improve the way we work and increase the value we provide to the housing finance system.”

Net revenues, which consist of net interest income and fee and other income, were $6.2 billion for the second quarter of 2015, compared with $5.4 billion for the first quarter of 2015.

Net interest income, which includes guaranty fee revenue, was $5.7 billion for the second quarter of 2015 compared with $5.1 billion for the first quarter of 2015. Net interest income for the second quarter was driven by guaranty fee revenue, including amortization income from prepayments, and interest income earned on mortgage assets in the company’s retained mortgage portfolio.

An increasing portion of Fannie Mae’s net interest income in recent years has been derived from guaranty fees rather than from interest income earned on the company’s retained mortgage portfolio assets.

This is a result of both the impact of guaranty fee increases implemented in 2012 and the shrinking of the retained mortgage portfolio. The company estimates that a majority of its net interest income for the second quarter of 2015 was derived from guaranty fees on loans underlying its Fannie Mae MBS. The company expects that guaranty fees will continue to account for an increasing portion of its net interest income.

Most Popular Articles

Fannie Mae, and the housing market’s inflation problem

Another month of steadily increasing home prices and insatiable demand led Fannie Mae’s Economic and Strategic Research Group to alter many of its 2021 predictions – in particular, its outlook on the symbiotic relationship between the housing market and inflation measures.

Jun 16, 2021 By

Latest Articles

Stewart Title merges Nevada offices

Title insurance giant Stewart Title announced that it is combining its two Northern Nevada divisions, Legacy Division and Western Division.

Jun 17, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please