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GSE Q1 Update: From Foreclosures to Mortgage-Backed Securities

Fannie Mae and Freddie Mac released their Q1 2019 financial results on Wednesday. Fannie Mae reported a net income of $2.4 billion and comprehensive income of $2.4 billion, while Freddie Mac reported a comprehensive income of $1.7 billion.

“Fannie Mae’s solid first quarter financial results demonstrate the strength of our business model, our risk management capabilities, and our customer focus,” said Fannie Mae CEO Hugh R. Frater. “We are enhancing our credit risk transfer programs and attracting more private capital into the U.S. mortgage market. We continue to drive technology innovations to help make the mortgage market more certain, efficient, and simple for our customers. And we’re working with customers and partners to address critical challenges such as the shortage of affordable homes and apartments across the country.”

"Freddie Mac produced a healthy quarter, generating comprehensive income of $1.7 billion, up 13 percent from the fourth quarter,” said Freddie Mac CEO Donald H. Layton. “Our guarantee book of business over the prior year grew 5 percent, demonstrating our heightened competitiveness, and credit quality remains strong. We also delivered on our mission, making home possible for nearly 450,000 families. These results demonstrate how the transformed Freddie Mac today is a well-run financial institution that produces solid earnings, serves its customers, protects taxpayers and fulfills its mission."

Fannie Mae reports that it provided $85.1 billion in liquidity to the single-family mortgage market in Q1 2019, and noted they were  the largest issuer of single-family mortgage-related securities in the secondary market.

In their report, Freddie Mac noted its Foreclosure prevention activity, including the 15,000 single-family loan workouts in Q1. According to the Federal Housing Finance Agency, Fannie Mae and Freddie Mac completed 13,589 foreclosure prevention actions in January, bringing the total number of preventative actions to approximately 4.3 million since the start of conservatorships in September 2008.

More than half of the actions reported in January (8,446) were permanent loan modifications, which is an increase from the 7,437 completed in December 2018. A total of 12,888 foreclosure prevention actions were reported in January.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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