Home > 2013 > Mortgages > Fannie Mae Bounces Back With Record Profits

Fannie Mae Bounces Back With Record Profits

Advertiser Disclosure Comments 0 Comments

Fannie Mae hit record net income for fiscal year 2012 at $17.2 billion while fourth quarter earnings were $7.6 billion, according to a recent report published by the company. This marks a significant gain since the $16.9 billion loss in 2011.

Declining delinquency rates and improving credit among consumers were attributed to the gains, the government-controlled company said. It also expects to see profitable results for the foreseeable future.

“Our financial results improved significantly in 2012 and we expect our earnings to remain strong over the next few years,” said Timothy J. Mayopoulos, president and CEO. “We have taken a number of actions since 2009 to manage our legacy book of business, build a healthy new book of business with responsible underwriting standards, price appropriately for risk, and reduce uncertainty by resolving outstanding issues. These actions have helped to strengthen our financial performance and to support the housing recovery by enabling families to buy, refinance, or rent a home even during the housing crisis.”

With the profits, Fannie Mae is poised to increase its dividend payments to the U.S. Treasury.

The stabilizing home market helped with Fannie Mae profits during the fourth quarter and fiscal year 2012. Home prices in January were 8.1 percent higher than the previous year while fourth quarter mortgage delinquencies were at their lowest since 2008, the report said.

Homeowners are receiving home loans through Fannie Mae, Freddie Mac and the Federal Housing Administration, backing nine out of every 10 loans and guaranteeing $5.2 trillion in mortgages. Meanwhile, foreclosures are declining, and the growing number of refinancing completions by Fannie Mae have helped struggling homeowners receive more affordable monthly mortgage payments.

Approximately 9.7 million refinancings were completing between January 1, 2009 and December 21, 2012, the report showed. Fannie Mae also provided mortgages to 2.7 million home purchases. A total of $3.3 in liquidity was provided to the mortgage market during the three year time frame.

Image: iStockphoto

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.