The government-sponsored enterprises (GSEs) have reported their Q1 financials, with both Fannie Mae and Freddie Mac continuing show strength in a challenging marketplace.
In the first quarter of 2021, Fannie Mae reported a net income of $5 billion, an increase over Q4 of 2020’s net income of $4.6 billion. Freddie Mac reported a Q1 net income of $2.8 billion, up slightly over the Q4’s totals of $2.6 billion.
“COVID-19 continues to present challenges and opportunities for homeowners and renters,” said Hugh R. Frater, CEO of Fannie Mae. “We had another quarter of near-record mortgage volumes as many took advantage of low rates to refinance or purchase a home. In addition, more than two-thirds of the 1.3 million homeowners with Fannie Mae loans who entered forbearance have since exited, even as we continue to help others find solutions. I’m proud of our steady performance and continuing focus on helping homeowners and renters through uncertain times.”
The Mortgage Bankers Association (MBA) estimates that an approximate 2.25 million homeowners remain in forbearance plans nationwide. GSE actions have assisted thousands of Americans remain in their homes during the pandemic through a number of forbearance options and plans.
Fannie Mae stated that more than 1.3 million single-family forbearance plans were initiated to help borrowers since the onset of the COVID-19 pandemic; as of March 31, 2021, with approximately 920,000 of these loans having exited forbearance, including nearly 337,000 through reinstatement and 275,000 through Fannie Mae’s payment deferral option.
Freddie Mac extended its single-family foreclosure and eviction moratorium covering approximately 12 million homeowners, until at least June 30, and extended forbearance plans to a maximum of 18 months for the approximately 230,000 single-family borrowers remaining in forbearance.
“Similarly, we extended COVID-19 related forbearance to qualifying multifamily property owners for another three months to June 30. And, tenants of those properties remain protected from eviction for non-payment of rent,” said Christian Lown, CFO of Freddie Mac. “Overall, we helped hundreds of thousands of at-risk homeowners and renters remain in their homes, while supporting a vibrant U.S. housing finance system that remained a source of strength for the national economy.”
Fannie Mae acquired approximately 340,000 home purchase loans and 1.1 million refinance loans during Q1, as scores of U.S. homeowners continued to take advantage of low interest rates in the quarter. Freddie Mac reported new business activity of $362 billion increased on strong home purchase and refinance activity, compared to Q1 of 2020, but declined slightly from Q4 of 2020.
“We helped nearly 94,000 families remain in their homes through Single-Family loan workout activity that increased from 11,000 in the prior year quarter, driven by completed forbearance agreements and payment deferrals primarily related to the COVID-19 pandemic,” said Lown.