Arab Today, arab today us mortgage finance giants post lower profits
Last Updated : GMT 22:49:48
Arab Today, arab today
Arab Today, arab today

US mortgage finance giants post lower profits

Arab Today, arab today

Arab Today, arab today US mortgage finance giants post lower profits

Washington - AFP

US government-controlled mortgage finance giants Fannie Mae and Freddie Mac reported Thursday lower first-quarter profits, with Freddie warning that profits could continue to fall as home price gains slow. Fannie Mae said it had $5.3 billion in net income in the first three months of the year, down 91 percent from a year ago. The results included $4.1 billion in revenue from legal settlements. Freddie Mac had a smaller year-over-year profit dip of 53 percent in the first quarter to $4.0 billion. Without $4.9 billion in legal settlements, the company would have posted a loss. Fannie Mae said it expects to pay $5.7 billion in dividends to the US Treasury in June, while Freddie Mac will pay $4.5 billion. With these dividend payments to the Treasury,  Fannie Mae will have paid a total of $126.8 billion and Freddie Mac $86.3 billion. Both companies' dividend payments to the Treasury have exceeded their 2008 bailout funds. But they warned that earnings were headed lower. "The level of earnings Freddie Mac has experienced in recent periods is not sustainable over the long term," the McLean, Virginia-based company said. "Freddie Mac's recent financial results, particularly the level of loan-loss provisioning, have benefited significantly from strong home price appreciation, which is beginning to moderate." Fannie Mae said it expects "substantially lower" net income this year compared with 2013, saying only that "net income may vary significantly from period to period." The sibling institutions, rescued by the government in a $180 billion bailout in 2008 after the housing market collapse and put under state conservatorship, back most of the mortgages in the United States by buying the mortgages and packaging them as securities. The two have benefited from a recovery in the US housing market and multibillion-dollar settlements in 2013 and 2014 from banks accused of misleading them about the quality of the mortgages they purchased. Both Fannie and Freddie have been operating under the conservatorship of the Federal Housing Finance Agency since September 2008. The two companies will remain under conservatorship until Congress acts to wind them down or remove government support.

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Arab Today, arab today us mortgage finance giants post lower profits Arab Today, arab today us mortgage finance giants post lower profits

 



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