Mortgage

Fannie Mae reports income of $4B in third quarter

Will pay Treasury $4 billion in third quarter of 2018

Fannie Mae reported Friday it posted a comprehensive income of $4 billion in the third quarter of 2018, which was primarily driven by the company’s business fundamentals.

This income is down from the second quarter this year, when the company reported comprehensive income of $4.5 billion, and even higher than the third quarter of 2017, when it saw a comprehensive income of $3 billion.

The company’s net income came in at $4 billion for the quarter, down from $4.5 billion in the second quarter this year.

The main driver of the decrease in net income was a decrease in credit-related income, which was partially offset by higher fair value gains in the third quarter of 2018 compared with the second quarter of this year, the GSE said.

The company also stated its pre-tax income was $5.1 billion for the third quarter of 2018, down from $5.6 billion for the second quarter.

Fannie Mae announced it provided $140 billion in liquidity to the mortgage market through financing and refinancing 726,000 homes and rental units.

A total of $122 billion in liquidity was awarded to the single-family mortgage market, which is an estimated market share of 40% for the third quarter of 2018.

Notably, the single-family serious delinquency rate fell to 0.82% as of September, falling from 1.24% as of December of last year and 1.01% as of September 2017.

The company said the climb in the single-family serious delinquency rate in the latter part of 2017 was attributed to the impact of Hurricanes Harvey, Irma, and Maria in 2017.

However, the rate has since resumed its prior downward trend because as borrowers in the affected areas have resolved their loan delinquencies by obtaining loan modifications or repayment.

The company also provided $18.2 billion in multifamily financing in the third quarter of 2018.

Multifamily net income came in at $549 million in Q3 of 2018, increasing from $504 million in Q2 of 2018. The increase in net income in Q3 was driven primarily by an increase in guaranty fee revenue as the multifamily guaranty continued to grow in this quarter.

The GSE will now pay out $4 billion to the U.S. Treasury if the Federal Housing Finance Agency agrees to a dividend in this amount. In August, Fannie Mae paid out 4.5 billion to the Treasury.

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