Posted by: Larry Stevens | November 21, 2014

Real Estate News Update – November 21, 2014

Real Estate Finance Insights

Good News

Profits Down at Fannie Mae & Freddie Mac

Fannie Mae and Freddie Mac reported sharply lower profits but still earned enough for a combined $6.8 billion payment to the U.S. Treasury, as the mortgage-finance companies also cited the potential for a thaw in home-loan access.  Both companies said the decline in net earnings doesn’t signal problems with their underlying businesses.  Rather, the weaker results stemmed mainly from issues related to slower home-price appreciation, which allowed the companies to decrease their reserves less quickly, and changes in interest rates.  Freddie’s large decline in net income was also affected by a $23.9 billion tax benefit recorded in the year-ago quarter.  Fannie and Freddie don’t make loans, but buy loans from lenders, wrap them into securities and provide guarantees to make investors whole if the loans default.  After the financial crisis, the companies forced lenders to buy back billions of dollars in loans…

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