Fannie Earnings Expected Later This Week, Freddie After

[Update 1: Clarifies timeline of Freddie’s earnings] Q210 earnings for Fannie Mae are expected later this week, with Freddie Mac reporting after, despite a major financial news website erroneously listing the date of the GSEs earnings release as today. Freddie Mac spokesperson Michael Cosgrove noted the company could release its Q210 earnings later this week but may wait until close of business Monday. Fannie Mae spokesperson Jason Vasquez also said earnings are anticipated “sometime this week,” although he added “we never publicly release dates on when we will file our financials.” However, it is believed that Fannie will release Thursday, with Freddie to follow after, sources say. As HousingWire reported, the Yahoo! Finance earnings calendar put Fannie’s and Freddie’s announcements on Monday — although neither GSE released any information as to the date of their respective announcements. Yahoo Finance! did not return requests for comment before this story was published and the calender remains uncorrected. The website had not made any scheduling errors on mortgage finance firms so far this earning season. In addition to a rough anticipated quarter — with both Fannie and Freddie ordered to de-list from the New York Stock Exchange (NYSE), for example — mortgage investors are also experiencing frustration in failed mortgage bond deals, according to a Bloomberg piece by Caroline Salas and Jody Shenn. Mortgage bond trades are failing in the wake of the Federal Reserve’s $1.25trn agency MBS purchases, which the piece notes could ultimately drive investors from the mortgage-bond market. The Q210 GSE results are anticipated to reflect ongoing distress in mortgage finance and mortgage-backed securities (MBS) markets. In 2009, the securitization market stood at $1.5trn. Total securities activity by Fannie was $807m in 2009 and Freddie $475m. Freddie and Fannie are also the top two institutional investors in  non-agency mortgage-backed securities. In May, Freddie posted a $6.7bn Q110 loss after adopting Financial Accounting Standards (FAS) 166 and 167. In order to cover a net worth deficit at quarter-end, the Federal Housing Finance Agency (FHFA), acting as Freddie’s conservator, requested $10.6bn in aid from the Treasury Department. The draw-down request brought total aid to $61.3bn under the senior preferred stock purchase agreement with the Treasury. Fannie posted a $11.5bn net Q110 loss, also on adopting FAS 166 and 167. The FHFA requested $8.4bn in aid from the Treasury, bringing the total draw-down to to $84.6bn under the senior preferred stock purchase agreement. In 2009, the GSEs’ losses totaled $93.6bn, and draws under the Treasury’s preferred stock agreements associated with those losses totaled $66.1bn. Fannie and Freddie forced lenders to repurchase $3.1bn of faulty mortgages out of their securities and off their books in Q110, up 64% from nearly $1.9bn one year earlier. The FHFA in July issued 64 subpoenas to various financial entities, seeking documentation related to private-label MBS in which the two GSEs invested. The FHFA directed the GSEs in June to de-list from the NYSE and any other national securities exchange. The direction came after the price of their common stock hovered near the minimum average closing price of $1 for more than 30 days for most months since the conservatorship took effect in September 2008. Write to Diana Golobay.

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