Fannie Mae Touches Refinancing Highs in Q2
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Fannie Mae has posted its best refinancing figures in the last 17 years and its Q2 earnings have put in shade its Q1 earnings, demonstrating that it is having a decent time despite the setback faced by the broader economy.
‘Fannie’ believes that its performance can be put down to spiked mortgage purchase activity as well as its ability to tackle credit-related expenses.
Fannie Mae’s CEO Hugh Frater stated in a conference call that “Our performance during this period benefited from strong underwriting practices that we’ve had in place for the last 10 years.” He further suggested that “Our presence in the market made it possible for more than 1 million homeowners to purchase a home or refinance their mortgage at lower rates during the second quarter.”
The truth behind Frater’s statement clearly establishes itself. Fannie Mae’s activity in the single-family mortgage for Q2 was in surplus of $350 billion. This is a mammoth 84% over the acquisitions made in Q1. The spike can be attributed to a $137 billion hike in the volume of refinancing (sitting at $259 billion).
That Fannie Mae has been able to meet the expectations of credit unions, independent mortgage brokers, and mini financial institutions have given its earnings a boost.
The Coronavirus can still put paid to Fannie Mae’s euphoria. Its effect can be seen in the 5.7% forborne single-family mortgage at June end. The pandemic has raised Fannie Mae’s serious delinquency levels for the single-family by 200 basis points.
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