April 02, 2013

Fannie profits may muddy reform debate

April 3, 2013 – Fannie Mae's profitability in the final quarter of 2012 – it reported $7.6 billion in its filing with the Securities and Exchange Commission this week – could complicate efforts by Congress to reduce the federal role in housing finance.

That is the general take in a Bloomberg report anticipating the positive earnings report. The article, published Monday, says Fannie Mae's and Freddie Mac's "reversal of fortune is creating political and administrative headaches in Washington, where few expected the turnaround and the future of mortgage financing remains undecided."

The House Financial Services Committee has nearly a dozen committee and subcommittee hearings on its list for April, and at least three of them will directly focus on the housing finance enterprises as well as the Federal Housing Administration and the Department of Housing and Urban Development. (See story.)

House Financial Services Chairman Jeb Hensarling, R-Texas, said last month that he hopes to see his committee mark up a housing finance reform package soon, and he has spoken strongly in favor of a limited government role in housing finance. NAFCU, meanwhile, is urging Congress to adhere to a set of core principles for reform, among them preservation of credit unions' unfettered access to the secondary market.

Fannie Mae, in Tuesday's report to the SEC, reported $7.6 billion in fourth-quarter net income and $17.2 billion for the year. It called that "the highest net income in company history."