DSNews The homepage of the servicing industry
""Fannie Mae"":http://www.fanniemae.com reported a net loss attributable to common stockholders of $8.7 billion for the first three months of this year, which company executives say was primarily driven by a decline in home prices during the quarter.
[IMAGE]The Q1 deficit included $2.2 billion in dividend payments to the U.S. Treasury on preferred stock the mortgage giant has turned over to the government in exchange for bailout money.
Excluding those dividends, Fannie says its quarterly loss would have amounted to $6.5 billion.
The GSE has requested another $8.5 billion in taxpayer funds from Treasury. With this latest draw, Fannie Mae has received nearly $100 billion since the government seized control of the company in September 2008.
Fannie's first-quarter shortfall actually narrowed compared to a year earlier, when the company reported a loss of $13 billion.
According to the company's ""latest earnings release"":http://www.fanniemae.com/media/pdf/newsreleases/q12011_release.pdf;jsessionid=24KHNBCZS4SFPJ2FECISFGA, its first-quarter 2011 results reflect an increase in credit-related expenses, largely due to still-falling property values.
The Washington. D.C.-based GSE estimates that, although home prices have improved in some geographic regions, home prices on a national basis declined by 1.8 percent in the first quarter of 2011, which had a direct and negative impact on its credit-related expenses.
Fannie notes that ""substantially all"" of the company's credit-related expenses in the first quarter were related to its legacy, pre-2009 book of business. While the company continues to work through losses on its legacy book, it expects that the single-family loans it has acquired since January 2009 will be profitable over their lifetime, the GSE said.
[COLUMN_BREAK]""We expect our credit-related expenses to remain elevated in 2011 as we continue to be negatively impacted by the prolonged decline in home prices,"" said Michael J. Williams, president and CEO. ""As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company's overall single-family guaranty book of business.
Fannie Mae's single-family book of business had $206 billion in nonperforming loans as of March 31, 2011, the ""vast majority"" of which were attributable to loans purchased or guaranteed from 2005 through 2008.
""The company expects that future defaults on its legacy book and the resulting charge-offs will occur over a period of years,"" Fannie Mae stated in its report on earnings.
Fannie Mae's single-family serious delinquency rate decreased to 4.27 percent as of March 31, 2011, from 4.48 percent as of December 31, 2010, and from 5.47 percent as of March 31, 2010.
The decrease in the serious delinquency rate was primarily the result of home retention solutions, mainly loan modifications, and foreclosure alternatives completed, combined with foreclosures when a viable solution was not available, the GSE explained.
""The volume of loans impacted by these actions continues to exceed the number of loans becoming seriously delinquent, thereby decreasing the percentage of the company's seriously delinquent loans,"" Fannie said. ""The decrease also is attributable to the company's acquisition of loans with stronger credit profiles in 2010 and the first quarter of 2011.""
During the first quarter of 2011, Fannie Mae completed more than 78,000 single-family loan workouts, including more than 60,000 home-retention solutions.
Loan modifications totaled 51,043, while repayment plans and forbearances were nearly 10,000.
During the same three-month period, the GSE completed 17,120 short sales and deeds-in-lieu of foreclosure.
Fannie Mae acquired 53,549 single-family REO properties through foreclosure in the first quarter of 2011, compared with 45,962 in the fourth quarter of 2010.
As of March 31, 2011, the company's inventory of single-family REOs was 153,224. The carrying value of this bank-owned portfolio was $14.1 billion.
