Fannie Mae reveals financial results
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The financial report also revealed that it provided $191 billion in liquidity to single-family and multifamily mortgage markets during the second quarter and acquired around 334,000 home purchase loans and 240,000 single-family refinance loans. Regarding rentals, the company financed around 156,000 units of rental housing during the same period, primarily affordable to households earning at or below 120% of the area median income, providing support for the workforce and affordable housing.
Commenting on the latest quarter’s financial results, Fannie Mae president and interim CEO David C. Benson said: “Our solid second-quarter results enhance our financial strength, and we remain focused on both managing risk and serving our mission to provide sustainable and affordable financing for the benefit of renters and homeowners.”
Fannie Mae also reported that its credit-related expense totalled $251 million during Q2 2022, a significant jump from only $201 million in the first quarter. The growth was partly driven by an increase in interest ratios partially offset by home price growth.
It added that the positive impact of home price growth on the company’s allowance was reduced by recent market indicators that suggest home price growth may be moderating faster than the company anticipated. Additionally, the rise in actual and projected interest rates in Q2 2022 more than offset the benefit from home price growth.
“Increases in interest rates reduce the expected volume of loan prepayments and extend the expected life of previously modified loans accounted for as troubled debt restructurings, or TDRs, as it is less likely these loans will refinance,” the report said.
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