CAPITAL: Slight Improvement at Fannie

  • JJ Hornblass
  • December 30, 2009
  • 0

An interesting article in the Wall Street Journal today highlights why the Treasury Department’s Christmas Eve gift of more liquidity for Fannie Mae and Freddie Mac eases the financial pressure on the two mortgage enterprises.

What the article neglects to mention is that Fannie Mae’s mortgage portfolio has flattened out in recent months. In data released Monday, Fannie disclosed that liquidations in its mortgage portfolio climbed to $9.17 billion in November, nearly 1% more than in October, although on a year-over-year basis liquidations are 39% higher. Suffice it to say, Fannie’s liquidations bumped around the low $9 billions through the fall compared to the $10 billion-to-$12.5 billion range from February to August.

There’s no pride in $9.17 billion of liquidations in a month, but at least the overall credit-performance trend is slightly better at Fannie. Now, the article today implies that the freer reign from Treasury will allow Fannie to write off more loans, and even buy more non-performing loans, so all these numbers come with those caveats. I guess I tend to focus on the positive.

See Fannie’s November numbers here.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

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