Federal National Mortgage AssctnFnni Me (OTCBB:FNMA) was a notable decliner on Friday. The stock was lower by close to 1% on the back of above average volumes. The stock has been in a strong downtrend forming lower tops and lower bottoms, which is considered to be a bearish signal. The stock currently trades below important moving averages. Traders believe the stock could head to levels of $2.143 in the near term. The relative strength index continues to trend lower pointing towards inherent weakness, which is a bearish sign. The stock would face resistance at levels of $2.31 on the upside.
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) has released information about its third quarter earnings. The company filed the earnings with the Securities and Exchange Commission through a Form 10-Q report.
The news release indicates that the company earned a net income of $2 billion in the quarter ended September 30, 2015. The report also indicated a comprehensive income of $2.2 billion. The firm reported a net worth of $4 billion for the quarter, thus translating to a dividend obligation of $2.2 billion to be paid to the Treasury before the end of the year.
The company’s net income of $2 billion is in line with the comprehensive income of $2.2 billion for the quarter. It also compares with the second quarter earnings for 2015 that included a comprehensive income of $4.4 billion and a net income of $4.6 billion. The quarterly decline is as a result of losses in fair value and a balance caused by credit-related earnings. Fannie Mae had a net fair value loss of $2.6 billion which was courtesy of the negative Impact of the long-term interest rates.
The firm also acknowledges an effective tax rate of 35% that reflected in the $1.1 billion federal income tax provision for the third quarter. Fannie Mae’s CEO and President Timothy J. Mayopoulos stated that he was happy with the company’s administration for pushing such positive change into the housing finance business.
He also pointed out that the company provides original technology to lenders so that they can offer their loans with more efficiency and certainty. At the same time, the company still transfers enough credit risk towards the private sector as a means of providing more security to taxpayers.
Mr. Mayopoulos believes that the attractive financial results will provide proof of performance to lenders so that they can lend with more confidence. Continued efforts will allow families to acquire mortgages that are more affordable. The company projects that it will remain profitable in the future.