Fannie Mae recorded a net income of $14.2 billion last year, including $4.4 billion during Q4 2019.
The GSE’s net worth rose to $14.6 billion by the end of the year. Based on the current agreement with the U.S. Department of the Treasury and the Federal Housing Finance Agency (FHFA), the company can retain quarterly earnings until its net worth reaches $25 billion.
Fannie Mae provided more than $650 billion in liquidity to the mortgage market in 2019, helping finance more than three million purchases, refinances, and rental units.
They were the largest issuer of single-family mortgage-related securities in the secondary market during 2019, with an estimated market share of single-family issuances of 37%.
Fannie Mae finances 25% of all single-family mortgages in the U.S.
The GSE announced it made changes to its single-family credit risk transfer structure last year, increasing the company’s capital relief and reducing risk.
“Fannie Mae also began obtaining credit protection on single-family reference pools containing seasoned loans, increasing the percentage of the company’s book covered by credit risk transfer, reducing the company’s capital requirements, and further reducing risk,” the release states.
Fannie Mae’s mortgage portfolio fell to $153.6 billion at the end of 2019 from last year’s final number of $179.2 billion. This is due to the decline in the company’s loss mitigation portfolio driven by sales of reperforming loans.
Invest gains were $923 million during Q4 2019 compared to $253 million in Q3 2019. Fannie Mae added that investment gains totalled $1.8 billion in 2019—an increase from last year’s final number of $952 million.
“The increase in investment gains for the fourth quarter of 2019 and for the year was driven primarily by an increase in gains from sales of single-family held-for-sale loans and available-for-sale securities,” Fannie said.
FHFA Director Dr. Mark Calabria told FOX Business late last year that Fannie Mae and Freddie Mac are building the capital necessary to get out of conservatorship, but there is still a little way to go.
"I believe that under the statute I am required to fix [Fannie and Freddie]," Calabria said.
"Fannie and Freddie are less leveraged than when I started," Calabria added. "We're going in the right direction."
According to Calabria, regulators will know what the target capital level for Fannie Mae and Freddie Mac will be sometime next year, noting that he'd feel comfortable with "a whole lot more than they have today.