WASHINGTON (5/9/14)--Single-family guaranty fee income brought in by Fannie Mae totaled $2.9 billion in the first quarter of 2014, and the government-sponsored enterprise said it expects those fees to become the primary source of the company's revenues in the near future.
Net income was $5.3 billion and comprehensive income was $5.7 billion during that quarter, Fannie Mae added. This is the ninth consecutive quarter of profits for Fannie Mae.
Overall, Fannie Mae said it expects to remain profitable for the foreseeable future.
Fellow government-sponsored enterprise Freddie Mac also reported strong financials in the first quarter of 2014: That firm reported quarterly income of $4 billion, and was profitable for the tenth straight quarter. However, Freddie Mac cautioned that the current level of earnings would not be sustainable over the long term.
Fannie Mae last year announced plans to increase guaranty fees, but new Federal Housing Finance Agency Director Mel Watt said he planned to delay these planned increases.
Under former acting Director Ed DeMarco, the FHFA had planned to increase base guarantee fees for all mortgages by 10 basis points, update the up-front guarantee fee grid to better align pricing with the credit risk characteristics of the borrower, and eliminate the up-front 25 basis point adverse market fee, except in the four states whose foreclosure carrying costs are more than two standard deviations greater than the national average. These planned increases would have resulted in an average guaranty fee increase of approximately 11 basis points for the third quarter of 2013.
Watt said he will thoroughly evaluate the proposed fee changes, and would give the public a minimum of 120 days' notice before he made any changes to the guaranty fee structure.
The Credit Union National Association has urged FHFA not to go forward with these fee increases.