Page 37 - May-June 2018 GSE Report Flip Book

FANNIE MAE AND FREDDIE MAC
MAJAYN-UAJRUYNE20210818
Development of capital restoration plans and suspending the net-worth sweep are crucial first steps to rebuilding capital buffers, and to accelerating the
date when the GSEs can finally be released from conservatorship as safe, reformed, regulated mortgage aggregators for lending institutions of all sizes and charters. These first steps help protect the taxpayers and help enable the GSEs to fulfill their statutory mandate of facilitating the financing of affordable housing for low-and moderate-income families while maintaining a strong financial condition. As stated above, HERA gives FHFA the authority to take these actions.
...[T]he mere development of such recapitalization plans does not in any way interfere with the prerogatives of Congress to adopt GSE reform legislation. In fact, we believe such plans would enhance Congress’ understanding of what recapitalization entails, which would be a benefit to Congress as it looks for the best policies in this area.
The signatories include the Community Home Lenders of America, Independent Community Bankers of America, The Leadership Conference on Civil and Human Rights, Leading Builders of America, NAACP, National Community Reinvestment Coalition, National Urban League, Prosperity Now, and The Community Mortgage Lenders of America. (Press Release, Independent Community Bankers of America, 06/18/18)
Fannie Mae and Freddie Mac release their first quarter earnings
During the media call for Fannie Mae’s first quarter results, CEO Tim Mayopoulos said:
We reported pretax income of $5.4 billion for the first quarter, compared to $5 billion for the fourth quarter of 2017, reflecting the strength of our underlying business. In addition, we reported $4.3 billion in net income and $3.9 billion in comprehensive income for the quarter. These compare with a net loss of $6.5 billion and a comprehensive loss of $6.7 billion for the fourth quarter of 2017.
The primary driver in the shift in net income was the one-time negative impact to our fourth quarter results from the Tax Act. As we had said last quarter, that was a one-time event resulting [from] a reduction of the corporate tax rate. Starting this quarter and going forward, we will benefit from this lower rate. The benefit in the first quarter was approximately $700 million.
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