The Week Ahead: What’s in Store for the GSEs’ Earnings?

Falling Money BHThe big news for Freddie Mac’s Q2 earnings report was that it didn’t take a loss for the second quarter.

Freddie Mac’s Q2 net income of $993 million was a major recovery from its Q1 net loss of $354 million, as was its reported $1.1 billion comprehensive income for Q2, a $1.3 billion upswing from its comprehensive loss of $200 million in Q1.

Compared to a year earlier, however, Freddie Mac’s quarterly profit declined due to lower interest rates and losses from derivatives. A year ago, the GSE posted a profit of $4.17 billion. But Q2’s biggest number is an increase in net income of $1.3 billion from Q1.

In comparison, Fannie Mae’s profitability in Q2 was 37 percent less than the same quarter a year ago, but the GSE still reported a net income of $2.9 billion during the quarter (compared with $4.6 billion in Q2 2015) in its Q2 earnings report.

Still, Fannie Mae’s net income in Q2 nearly tripled over-the-quarter from a $1.1 billion showing in Q1 this year, largely due to lower fair value losses driven by smaller decreases in longer-term interest rates; higher credit-related income attributable primarily to an increase in home prices and a decrease in actual and projected mortgage interest rates, as well as a decrease in foreclosed property expense; and higher net revenues driven primarily by an increase in mortgage prepayments.

Freddie Mac with release its Q3 earnings report on Tuesday, November 1, and Fannie Mae is set to release its Q3 earnings the following day on Wednesday, November 2. What will these earnings reveal about the progress of the GSEs?

November 1-3, 2016 – The Single Family Rental Summit in Frisco, Texas

While the single-family rental market continues to redefine its borders, the investment landscape offers opportunity for many in a volatile marketplace that has often been misunderstood and sometimes fragmented. Navigating this complex and dynamic terrain takes careful planning and strategic partnerships.

The Five Star Institute will be hosting The Single-Family Rental Summit on November 1-3 in Frisco, Texas to address just that. The summit will provide an important conduit for SFR leaders to have the pivotal conversations that will push the investment industry forward.

Top subject matter experts and skilled SFR practitioners will lead discussion panels and training sessions that will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, mid-cap, and large investors, and new developments related to technology and professional services.


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