Freddie Mac's net income was down $1.8 billion from the prior quarter, citing higher credit-related expense of $1.1 billion, or $0.9 billion, after-tax, primarily due to higher expected credit losses as a result of the COVID-19 pandemic. The company also pointed to lower gains on single-family asset disposition activity of $0.6 billion.
"Freddie Mac’s first quarter was marked by unprecedented challenges to our country, our business and our markets—and I am very proud of how we have responded," said David M. Brickman, CEO, Freddie Mac. "We are offering relief to millions of homeowners and renters, supporting our customers in new and vital ways, and serving as a stabilizing force for the housing finance system. Through these efforts, we are continuing to fully serve our mission."
Meanwhile, Fannie Mae reported net income of $461 million for the first quarter of 2020, compared with net income of $4.4 billion for the fourth quarter of 2019. Like Freddie Mac, Fannie reported that the decrease in net income was due primarily to a shift from credit-related income to credit-related expense driven by the economic dislocation caused by the COVID-19 outbreak.
As part of the company's report, Fannie Mae also noted that it has implemented new policies to enable the company’s single-family and multifamily loan servicers to better assist borrowers and renters impacted by COVID-19, including requiring servicers to provide forbearance to single-family borrowers reporting they are experiencing a financial hardship due to the COVID-19 outbreak for up to 180 days.
“Fannie Mae is committed to fulfilling its vital role in helping our customers, our servicers, and the market as a whole manage through this period of uncertainty," said Fannie Mae CEO Hugh R. Frater. "We recognize that more work lies ahead to help borrowers, renters, and the housing market recover. I want to give special thanks to the people of Fannie Mae, who have stepped up to their mission with characteristic grit and humility, and with their rock-solid commitment to provide a sound foundation for our country’s housing market.”