Fannie Mae Releases 2022 Financials, Freddie Mac Delays Report
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae’s earnings fell sharply in the fourth quarter of 2022 and for the full year, reflecting the challenges faced in the mortgage industry.
Meanwhile, Freddie Mac cancelled its earnings announcement that was scheduled for February 15. A new reporting date has not been announced.
Fannie Mae reported $12.9 billion annual net income and $1.4 billion for the fourth quarter of 2022.
Annual net income decreased $9.3 billion in 2022 compared with 2021. The company said the decline was primarily driven by an $11.4 billion shift to provision for credit losses and a $1.6 billion shift to investment losses, partially offset by a $1.1 billion increase in fair value gains.
Fourth-quarter profits plummeted by almost $4 billion on a year-over-year basis, from $5.2 billion during the robust fourth quarter of 2021.
“Our 2022 results reflect a housing market in transition. We’re proud that Fannie Mae helped approximately 2.6 million households buy, refinance, or rent a home last year, while generating solid earnings and continuing to build our net worth,” said CEO Priscilla Almodovar.
“We expect there will be economic headwinds in 2023 and that housing affordability will continue to remain a challenge for many homebuyers and renters. We also know that Fannie Mae has the capabilities and dedication to help provide liquidity and stability, and to support homebuyers and renters throughout all economic cycles.”
Fannie provided $684 billion in liquidity to the mortgage market in 2022, down from $1.4 trillion in the previous two years.
In addition, the company suffered investment losses of $297 million in 2022, compared with investment gains of $1.4 billion in 2021. This was primarily driven by a significant decrease in the market value of single-family loans that resulted in valuation losses on loans held-for-sale at period-end, as well as lower prices on loans sold during the year.
The company acquired $614.8 billion in single-family conventional mortgages last year, a 55 percent decrease from 2021. Purchase volume fell from $451.3 billion in 2021 to $378 billion last year, though 45 percent of last year’s volume was for first-time homebuyers. Refinance acquisition volume was $236.9 billion in 2022, a decline from $903.7 billion in 2021, due to the higher mortgage interest-rate environment. The share of purchase loans, which generally have a higher loan-to-value ratio, increased as a percentage of the company’s single-family acquisitions to 62 percent in 2022 from 33 percent in 2021.
Multifamily business fell only slightly, from $69.5 billion in 2021 to $69.2 billion last year.
Fannie Mae’s overall net worth increased from $47.4 billion in 2021 to $60.3 billion as of the end of 2022.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
