Fannie Mae Dividend Payments to Exceed Treasury Draws

Fannie Mae Dividend Payments to Exceed Treasury Draws

Fannie Mae released its Comprehensive Income Statement for the fourth quarter of 2013, noting a quarterly comprehensive income of $6.6 billion. It was the eighth consecutive quarterly profit for the government-sponsored enterprise (GSE).

The report noted the positive quarterly income “contributed to Fannie Mae’s positive net worth of $9.6 billion as of December 31, 2013.”

Annual net income for Fannie Mae was $84 billion.

The company will pay $7.2 billion in dividends on senior preferred stock to the U.S. Department of the Treasury in March, 2014.  The payment marks “the first time in which the company”s cumulative dividend payments to Treasury will exceed its total draws,” the statement reports.

Through the end of December, 2013, Fannie Mae requested cumulative draws totaling $116.1 billion and paid $113.9 billion in dividends to Treasury. The March payment will exceed total Treasury draws.

The report comments, “Fannie Mae has not received funds from Treasury since the first quarter of 2012.”

Since January 1, 2009, Fannie Mae has provided $4.1 trillion in liquidity to the mortgage market through its purchasing and guaranteeing of loans. The GSE enabled borrowers to complete 12.3 million refinancings, 3.7 million home purchases, and financed 2.2 million units of multifamily housing.

Fannie Mae credits the strong earnings of Q4 2013 to stable revenues, credit-related income, and fair value gains. Credit-related income specifically received boosts from an increase in home prices, a decline in the delinquency rate, and “updated assumptions and data used to estimate the company’s allowance for loan losses in 2013.”

The report notes further factors in the increased income: “Fannie Mae’s 2013 financial results also were positively affected by the release of the company’s valuation allowance against its deferred tax assets and the large number of resolutions the company entered into during the year relating to representation and warranty matters and servicing matters.”

However, the report is cautious about the foreseeable future, noting that while it expects to remain strong in the coming years, net income in the future is expected to drop from 2013.

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