Magazine article Mortgage Banking

Fannie Posts Solid Q3 Results with Net Income of $1.8 Billion

Magazine article Mortgage Banking

Fannie Posts Solid Q3 Results with Net Income of $1.8 Billion

Article excerpt

In a earnings press release for the third quarter, Fannie Mae said it expects to report annual net income in 2012 for the first time since 2006. The company earned net income of $1.8 billion in the quarter ending Sept. 30.

Fannie said it would be able to pay its third-quarter dividend of $2.9 billion to the Treasury Department without any draw under its senior preferred stock purchase agreement.

This year's third-quarter net income of $1.8 billion compares very favorably to the net loss of $5.1 billion during the third quarter of 2011. The company said that for the first nine months of this year, Fannie reported $9.7 billion in net income.

Fannie Mae attributed the improved results to a combination of lower credit-related expenses resulting from an increase in actual and expected home prices, higher sales prices for its real estate--owned (REO) properties and a decline in fair value losses.

"We are seeing signs of sustained improvement in housing, and our actions to support the housing recovery have generated strong financial results in 2012," said Timothy Mayopoulos, president and chief executive officer. He added, "Fannie Mae's priorities are well aligned with the public interest. Our financial condition has improved markedly. We have paid the Treasury $8.7 billion in 2012, and our expected ability to pay taxpayers is growing. We continue to fund the mortgage market, assist homeowners in distress and lay the foundation for a better housing finance system. …

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