WASHINGTON – Fannie Mae said this morning it stopped hemorrhaging red ink in the first quarter and had a $2.7 billion profit.
That means that Fannie will not need any additional government bailout funds for the quarter, after having received almost $120 billion since the September 2008 takeover by the federal government. Last week Freddie Mac announced a $1.2 billion loss for the first quarter and requested an additional $19 million in bailout funds.
The two companies are critical to credit unions as they buy as much as half of all residential mortgages originated by credit unions for repackaging as mortgage-backed securities on the secondary market.
Fannie said credit-related expenses decreased by nearly two-thirds in the first quarter, and total loss reserves are expected to have peaked as of December 31.
The first quarter profit compares to a loss of $6.5 billion in the first quarter of 2011 and a loss of $2.4 billion in the fourth quarter of 2011.
Fannie said the significant improvement in the company’s financial results in the first quarter of 2012 was due primarily to lower credit-related expenses, resulting from a less significant decline in home prices, a decline in the company’s inventory of single-family real estate owned properties coupled with improved REO sales prices, and lower single-family serious delinquency rates.
