Fannie Mae Income Rises
Fannie Mae Income Rises
On the heels of a similar announcement from Freddie Mac on Tuesday, Fannie Mae revealed yesterday that it posted second-quarter net income of $5.1 billion.
That’s a substantial increase over the $2.7 billion reported in the first quarter of this year and from a net loss of $2.9 billion in the second quarter of 2011. Additionally, Fannie didn’t need any more funds from the Treasury and pledged to pay a $2.9 billion dividend to taxpayers.
“We’ve have had two very good quarters,” says Timothy J. Mayopoulos, who became Fannie Mae’s chief executive in June. “In the longer term, we’re encouraged by what we see, but it’s going to be driven by factors that are bigger than we are,” including unemployment and consumer confidence.
The government-sponsored enterprises (GSEs) have become profitable again as home values have gone up and delinquency rates have declined. Both GSEs say loans made during the bubble years that borrowers were more likely to default on are becoming a smaller share of their portfolios.
Source: “Twin Reports Stoke Cautious Optimism for Rebound in the Housing Market,” The New York Times (Aug. 8, 2012)
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