Fannie Mae reports 2019 income of $14.2 billion

Fourth-quarter net income was $4.4 billion, all of which the GSE will keep

Fannie Mae, the country’s largest mortgage financier, reported Thursday it posted a net income of $14.2 billion for the full-year 2019, according to the company’s fourth quarter earnings report.

Fannie Mae’s fourth quarter net income came in at $4.4 billion, up from prior year’s fourth quarter net income of $3.2 billion. It was also up from Q3’s income of $3.96 billion.

The company’s full-year net income was down year-over-year from 2018, when the company pulled in $16 billion total.

According to the company, the decrease in net income for 2019 “was driven primarily by a shift to fair value losses in 2019 from fair value gains in 2018 as a result of decreasing interest rates throughout most of 2019.”

Despite that, the company still made a profit in the fourth quarter and for the year, but unlike the somewhat recent past, that money will not be going to the Department of the Treasury this time around.

Based on the current agreement with the Treasury and the Federal Housing Finance Agency, the company may retain its quarterly income until its net worth reaches $25 billion.

Therefore, there are no dividends payable to the Treasury for the first quarter of 2020.

According to Fannie Mae CEO Hugh Frater, the addition of $4.4 billion in profit to the company’s coffers pushes the GSE’s net worth past $14 billion.

“Our results further demonstrate the strength and earnings power of
Fannie Mae’s business in 2019, including our ability to manage risk and generate solid returns in both our single-family and multifamily business lines,” Frater said.

“We continue to fulfill our mission to provide liquidity to the mortgage market and meet our housing goals, while growing our guaranty fee income and managing expense growth,” Frater added. “We begin 2020 with a net worth of $14.6 billion, thanks to strong retained earnings and prudent risk management.”

Fannie Mae also announced it provided more than $650 billion in liquidity to the mortgage market in 2019.

Through its purchases and guarantees of mortgage loans in 2019, Fannie Mae acquired approximately 2.3 million single-family mortgage loans.

According to the company, Fannie Mae was the largest issuer of single-family mortgage-related securities in 2019 with an estimated market share of single-family mortgage-related securities issuances of 37%.

Fannie Mae states that it has financed approximately 1 in 4 single-family mortgages in the United States.

Fannie Mae also financed approximately 726,000 units of multifamily housing in 2019, including approximately 178,000 in Q4 of 2019.

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