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Federal National Mortgage Association Message Board

  • dell_stk dell_stk Nov 7, 2012 8:44 PM Flag

    Fantastic results: Net income of $1.8 billion after a $2.9 billion dividend payment to the Treasury on the government’s stake

    The company had third-quarter net income of $1.8 billion after a $2.9 billion dividend payment to the Treasury on the government’s stake, largely because of rising home prices, Washington-based Fannie Mae said today in a statement. The profit compared with a $5.1 billion loss in the same period a year earlier.

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    Fannie Mae (FNMA) said it won’t seek U.S. Treasury Department aid for a third straight quarter and expects to post its first annual profit since 2006 as the housing market’s recovery helps bolster financial results.
    The company had third-quarter net income of $1.8 billion after a $2.9 billion dividend payment to the Treasury on the government’s stake, largely because of rising home prices, Washington-based Fannie Mae said today in a statement. The profit compared with a $5.1 billion loss in the same period a year earlier.
    “The most significant driver is the improvement in home prices, and then we’ve had a number of other positive things that have added to it, like declining delinquencies” and better sales execution on foreclosed homes owned by the company, Susan McFarland, Fannie Mae’s chief financial officer, said in a telephone interview. “When you look across the board, virtually all of the different parts of our financial statements have been improving.”
    Fannie Mae and Freddie Mac have required almost $190 billion in aid since they were seized by federal regulators and placed under U.S. conservatorship in 2008 amid losses that pushed them toward insolvency. The two government-sponsored enterprises, which provide liquidity by buying and bundling mortgages, own or guarantee more than half of U.S. home loans.
    Freddie Mac (FMCC), based in McLean, Virginia, said yesterday it wouldn’t need a Treasury draw for the second quarter in a row as it reported third-quarter net income of $2.9 billion after accounting for a $1.8 billion dividend payment to Treasury.
    Starting next year, the two taxpayer-owned companies will cease paying dividends of 10 percent to the Treasury and will instead pay any profits above a permitted capital reserve.

    Sentiment: Strong Buy

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    • At this rate in next 2-3 years both FNF would have paid the entire debt that it owes to the Treasury...

      PPS for FNMA could easily hit above $25 in next 2-3 years...

      If FNMA is earnings $4.7B per Q then in one year it can earn potentially $20B and in three years it would have earned and paid of $60B. Both FNF will end up paying $60B each to the treasury and we are pretty much done in paying the complete ($120B) debt.

      In next 2-3 years housing would have improved and completely stabilized.

      Folks buy as much as you can buy at these rock bottom prices... I added more today and will continue to keep adding as long as the PPS is this rock bottom low...

      Sentiment: Strong Buy

 
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