May 26, 2018

FHFA Credits Housing Prices for Lifting GSEs

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FHFA Credits Housing Prices for Lifting GSEs

The Federal Housing Finance Agency says “market drivers,” such as home prices and mortgage rates, are helping Fannie Mae, Freddie Mac, and the Federal Home Loan Banks to get back on firm financial footing. 

The government-sponsored enterprises, or GSEs, reported positive earnings in the second quarter. Meanwhile, home prices have risen 4 percent from last May to this one. The second quarter marked the seventh consecutive quarter for home price increases. 

Earnings for the GSEs are also getting a lift from an increase in income due to rising interest rates during the second quarter. Delinquencies of pre-2009 loans have also declined, helping to curb the GSEs’ losses. Seriously delinquent loans have fallen by 22 percent from a year earlier. Rising home prices have also lowered expectations about mortgage defaults, and have reduced the losses in sales that accompany REOs, FHFA notes. 

The GSEs have reported a combined net income of $15.1 billion in the second quarter, and $78.4 billion for the entire first half of 2013, FHFA reports. 

Source: “FHFA Credits ‘Market Drivers’ for GSE Earnings,” Mortgage News Daily (Sept. 19, 2013)

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