From economist Tom Lawler:
Fannie Q3 Highlights: GAAP Net Income $8.7 Billion; Dividend Payment to Treasury in December $8.6 Billion, Bringing Cumulative Payments to $113.9 Billion; SF REO Inventory Up on Slower Dispositions Due to “Overall Market Conditions”
Fannie Mae reported that its GAAP net income in the quarter ended September 30, 2013 was $8.7 billion, and that its “GAAP” net worth at the end of September was $11.6 billion, which under the term of the “revised” senior preferred dividend agreement means that Fannie will make a $8.6 billion dividend payment to the Treasury in December. That payment will make cumulative dividend payments to the Treasury of bout $113.9 billion. The Treasury’s senior preferred stock amount will remain at $117.1 billion. Fannie’s cumulative cash Treasury draws totaled $116.1 billion.
On the SF REO front, here are some summary stats on Fannie’s activity.
| Fannie SF REO Activity | |||
|---|---|---|---|
| Acquisitions | Dispositions | Inventory | |
| Q3/09 | 40,959 | 31,299 | 72,275 |
| Q4/09 | 47,189 | 33,309 | 86,155 |
| Q1/10 | 61,929 | 38,095 | 109,989 |
| Q2/10 | 68,838 | 49,517 | 129,310 |
| Q3/10 | 85,349 | 47,872 | 166,787 |
| Q4/10 | 45,962 | 50,260 | 162,489 |
| Q1/11 | 53,549 | 62,814 | 153,224 |
| Q2/11 | 53,697 | 71,202 | 135,719 |
| Q3/11 | 45,194 | 58,297 | 122,616 |
| Q4/11 | 47,256 | 51,344 | 118,528 |
| Q1/12 | 47,700 | 52,071 | 114,157 |
| Q2/12 | 43,783 | 48,674 | 109,266 |
| Q3/12 | 41,884 | 43,925 | 107,225 |
| Q4/12 | 41,112 | 42,671 | 105,666 |
| Q1/13 | 38,717 | 42,934 | 101,449 |
| Q2/13 | 36,106 | 40,635 | 96,920 |
| Q3/13 | 37,353 | 33,332 | 100,941 |
Fannie’s SF REO inventory increased from the end of June to the end of September, mainly as a result of a “surprisingly” large slowdown in REO dispositions. Fannie attributed the sharp drop in the sale of REO properties to “overall market conditions.”
Fannie Mae also reported that its internal “national” home price index, which is a repeat-sales index that (1) includes both Fannie-Freddie acquisitions and available public deed data; (2) excludes foreclosure transactions; and (3) in housing-unit weighted, was up by 9.4% over the 12 months ending in September.
Click on graph for larger image.
CR Note: Here is a graph of Fannie and Freddie REO. This was the first quarterly increase since 2010.
From Lawler: Freddie Q3 Highlights: GAAP Net Income $30.5 Billion, $23.9 Billion of Which Reflects Release of Valuation Allowance Against Net Deferred Tax Asset; Dividend Payment To Treasury in December $30.4 Billion
Freddie Mac reported that its GAAP net income in the quarter ended September 30, 2013 was $30.5 billion, $23.9 billion of which was related to a release of the company’s valuation allowing against its net deferred tax asset. This release, in turn, reflected the company’s massively improved earnings outlook. Freddie’s GAAP net worth at the end of September was $33.4 billion, which under the term of the “revised” senior preferred dividend agreement means that Freddie will make a $30.4 billion dividend payment to the Treasury in December. That payment will make cumulative dividend payments to the Treasury of about $71.345 billion, versus cumulative previous cash draws from Treasury of $71.336 billion. The Treasury’s senior preferred stock amount will remain at $72.3 billion.
On the SF REO front, here are some summary stats on Freddie’s activity.
| Freddie SF REO Activity | |||
|---|---|---|---|
| Acquisitions | Dispositions | Inventory | |
| Q3/09 | 24,373 | 17,939 | 41,133 |
| Q4/09 | 24,749 | 20,835 | 45,047 |
| Q1/10 | 29,412 | 20,628 | 53,831 |
| Q2/10 | 34,662 | 26,315 | 62,178 |
| Q3/10 | 39,053 | 26,334 | 74,897 |
| Q4/10 | 23,771 | 26,589 | 72,079 |
| Q1/11 | 24,707 | 31,627 | 65,159 |
| Q2/11 | 24,788 | 29,348 | 60,599 |
| Q3/11 | 24,378 | 25,381 | 59,596 |
| Q4/11 | 24,758 | 23,819 | 60,535 |
| Q1/12 | 23,805 | 25,033 | 59,307 |
| Q2/12 | 20,033 | 26,069 | 53,271 |
| Q3/12 | 20,302 | 22,660 | 50,913 |
| Q4/12 | 18,672 | 20,514 | 49,071 |
| Q1/13 | 17,881 | 18,984 | 47,968 |
| Q2/13 | 16,418 | 19,763 | 44,623 |
| Q3/13 | 19,441 | 16,945 | 47,119 |
Freddie’s SF REO inventory increased last quarter, “as foreclosure activity increased in judicial foreclosure states and disposition activity moderated.”
Freddie also showed that its “national” home-price index, a repeat-transactions index that (1) uses only Fannie/Freddie transactions; (2) uses repeat purchase transactions and some refinance transactions; and (3) is value weighted with state weights based on the share of Freddie’s SF mortgage portfolio, increased by 10.8% over the 12 months ending in September.