Fannie Mae reported $8.5 billion in net income for the third quarter, down from $10 billion in the previous quarter, as revenue from its single-family business fell 28%. All of its earnings will be going back to the U.S. Treasury Department as the agency seems to be nearing making good on its draws from Treasury.
The GSE reported nearly $5 billion in net income from its single-family business in 3Q compared to $6.5 billion the prior quarter. The secondary market agency purchased $198 billion in mortgages from lenders during 3Q, down 14% from the prior quarter.
Refinancings under HARP and other flexible financing programs fell 33% from the second quarter to 236,000 refis in 3Q.
“Fannie Mae's strong third-quarter results were driven primarily by continued stable revenue and credit-related income,” the company said Thursday in
Due to rising house prices and lower delinquency rates, the agency reduced its loan loss reserves by nearly $5 billion. It still has $48 billion in loss reserves.
Credit losses due to charge-offs declined to $1 billion from $1.5 billion in 2Q. The decrease was due primarily to the recognition of a settlement with Bank of America.
Fannie says it will pay $8.6 billion in dividends to Treasury in December as required under its conservatorship agreement. That will bring total dividend payments up to $114 billion. The GSE has received $117 billion in cumulative draws from Treasury since it was placed in conservatorship in September 2008.
Fannie recognized nearly $51 billion in deferred tax assets in the first quarter of this year, which also went to Treasury in the form of a dividend check. Freddie Mac just recognized its DTAs in releasing its 3Q earnings report on Thursday.
