Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) announced financial results for the recently concluded third quarter. The biggest highlight was company’s net income that surpassed $2 billion. Fannie Mae also filed Form 10-Q with SEC for the quarter ending September 30, 2015.
Insights of Financial Results
While the net income totaled $2 billion, comprehensive net income increased to $2.2 billion for the quarter. Reports claims that Fannie Mae expects to pay another $2.2 billion in dividends to Treasury in the next month. With this payment, the total dividends paid to the Treasury would surpass a whopping $144.8 billion up till now. However, this dividend payment doesn’t reduce $116.1 billion worth of treasury draws since 2008.
3Q2015 net income and comprehensive net income doesn’t stand anywhere close to 3Q2014 net income of $4.6 billion and comprehensive net income of $4.4 billion. The main reason for this huge adverse growth is said to be the fair value loss as well as reduced credit income.
The contribution of Fannie Mae to mortgage market cannot be sidelined. It provided a massive $132 billion in liquidity to the mortgage market in the recently concluded quarter, which helped many families to refinance, buy or rent homes without any hassle.
In the 3rd quarter alone, it executed over 29,000 workout solutions, helping many distressed families avoid foreclosures and retain their homes with the help of its proprietary programs and many other government run programs.
A couple of new initiatives taken by Fannie Mae, such as Credit Insurance Risk Transfer and Connecticut Avenue Securities transactions have not only reduced taxpayer’s risk but also increased private capital’s role in the mortgage industry.
The total unpaid principal balance of such transactions since October 2013 has gone past $464 billion. This balance represents a significant amount of credit balance on single-family mortgage loans, which have been transferred to the private market after October 2013.