Fannie Mae’s net worth doubles to $47 billion
Fannie Mae said its overall net income increased in 2021 to $22.2 billion, an increase of $10.4 billion from 2020, largely due to growth in its single-family business.
Net revenue increased $4.6 billion to $29.9 billion in 2021, primarily due to higher underwriting fee revenue, including that generated by the 50 basis point unfavorable market fee. base on most agency refinances. This fee was in place for half of the year, from December 2020 to July 2021, when the Federal Housing Finance Agency under interim manager Sandra Thompson eliminated him.
Among the company’s receipts, the single-family represents by far the largest share. Net single-family home revenues rose to $25.7 billion in 2021 from $21.9 the previous year, but segment revenue growth rose much more strongly, more than doubling year over year. ‘other. Fannie Mae reported single-family net income of $19.1 billion in 2021, down from $9.9 billion in 2020 and $11.9 billion in 2019.
Fannie Mae’s net worth now stands at $47.4 billion, an increase of $22.1 billion from 2020.
Fannie Mae’s charter requires it to promote access to credit, including in underserved areas. It also allows Fannie Mae to earn lower returns on mortgage financing for low- and middle-income families.
Thompson has previously emphasized affordability in her tenure as acting director of Fannie Mae and Freddie Mac‘s conservative. Fannie Mae CEO Hugh Frater reflected that focus on affordability in his prepared remarks, saying many sectors of the housing economy have done well in 2021, but “not for everyone.”
“Our housing mission to advance equitable and sustainable access to homeownership and quality affordable rental housing has never been more important,” said Frater. “Much more needs to be done to ensure that the US housing finance system serves all citizens fairly and is safe, sound, and properly capitalized.”
In 2021, 69% of single-family loans backed by Fannie Mae had credit scores above 740, and the average loan size increased from $279,800 to $281,530 in 2020. Fannie Mae reported that 16% of its acquisitions single-family loans were for the first time. -time-to-time shoppers, up from 13% in 2020.
Fannie Mae continues to operate under conservatorship, which means a turnover in the political administration can lead to changes in the way it does business.
In 2021, FHFA suspended several elements of the scorecard—how it sets priorities and annual expectations for GSEs—that had been set by FHFA under the previous administration. Fannie Mae reported that the FHFA has put plans on hold to develop a roadmap toward ending conservatorship, driving housing market reform, and ensuring efficient use of capital.
The FHFA also ordered Fannie Mae to suspend efforts to reduce its risk and complexity “to levels more appropriate for regulated entities with limited capital buffers.”
In its more than 300-page annual report, Fannie Mae also provided an update on the status of its proposed obligation to serve underserved markets for 2022 through 2024, which the FHFA rejected earlier this year. Fannie Mae said she has now revised and submitted the draft plans “for FHFA’s further review.”
The share of loans with borrowers in arrears also declined in 2021. The GSE reports that loans with COVID-19 related forbearance are past due in accordance with the contractual terms of the loan. By the end of 2021, Fannie Mae’s serious offender rate had fallen to 1.25%, from a 2020 high of 2.87%. Before the pandemic, the serious offender rate was 0.66%.