Fannie and Freddie continue to post profits
May 9, 2014 – Government-sponsored enterprises Fannie Mae and Freddie Mac posted net income numbers of $5.3 billion and $4 billion in the first quarter, respectively, and announced plans to make further dividend payments to Treasury.
Fannie will pay Treasury $5.7 billion and Freddie will pay $4.5 billion next month. Both have paid back the amount of their government bailouts from September 2008 already. Fannie was bailed out for $116 billion and Freddie for $71.3 billion.
The first quarter of 2014 was Fannie’s ninth profitable quarter in a row, and Freddie’s tenth. Freddie cited a decrease in mortgage delinquencies as an explanation for its progress.
In a conference call on Thursday, however, Fannie CEO Timothy Mayopoulos said the GSEs are operating “with no cushion” and that the first-quarter profits are “unsustainable” due to capital restrictions, according to CU Journal.
NAFCU is pressing to ensure small institutions equal, competitive access to the secondary mortgage market in any future housing finance system. It is also concerned about the cost of the proposed reforms and the uncertainty posed by moving toward a new system. The association has made several recommendations with other financial trade organizations to improve the discussion draft proposed by Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho.
Sen. Jon Tester, D-Mont., told CQ Roll Call he believes the delayed mark-up of the Johnson-Crapo draft will be rescheduled for next Thursday but that if it doesn’t happen by then, lawmakers may have run out of time for the legislation.
CU Journal article