Thursday, November 06, 2014

Lawler: Fannie, Freddie in Q3

by Bill McBride on 11/06/2014 05:08:00 PM

From housing economist Tom Lawler:

Fannie Mae reported that GAAP net income in the quarter ended September 30, 2014 was $3.9 billion, while “comprehensive income” was $4.0 billion. As a result, in December Fannie Mae will make a dividend payment to the US Treasury of $4.0 billion, bringing total dividend payments to $134.5 billion, compared to $116.1 billion in previous “draws” from the Treasury. Dividend payments do not reduce the Treasury’s senior preferred stock balance.

Freddie Mac reported that GAAP net income in the quarter ended September 30, 2014 was $2.0 billion, while “comprehensive income” was $2.8 billion. As a result, in December Freddie Mac will make a dividend payment to the US Treasury of $2.8 billion, bringing total dividend payments to $91.0 billion, compared to $71.3 billion in previous “draws” from the Treasury. Dividend payments do not reduce the Treasury’s senior preferred stock balance.

Fannie’s average charged Gfee on new SF acquisitions last quarter was 63.5 bp, up from 25.7 bp in 2010.

Freddie’s average charged Gfee on new SF acquisitions last quarter was 57.2 bp, up from 25 bp in 2010.

Freddie’s regulator instructed the GSEs to raise base fees several times over the last four or so years. In addition, pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011, both Fannie and Freddie increased their guaranty fee on all SF residential mortgages delivered to them on of after April 1, 2012 by 10 basis points, with the incremental revenue being remitted to Treasury.

Fannie and Freddie REO Click on graph for larger image.

CR Note: Here is a graph of Fannie and Freddie Real Estate Owned (REO).

REO inventory decreased 17% year-over-year in Q3 for Fannie and Freddie combined, and combined REO inventory is at the lowest level since Q3 2009.

Delinquencies are falling, but there are still a large number of properties in the foreclosure process with long time lines in judicial foreclosure states.