Fannie Mae Earnings Reveal As Steadying Housing Market

31 July 2020

Fannie Mae Earnings Reveal As Steadying Housing Market

Inman News

Only 5.7% of the single-family loans guaranteed by the GSE were in forbearance at the end of the second quarter, down from 7% at the end of the previous quarter.

Fewer mortgages guaranteed by Fannie Mae were in forbearance at the end of the second quarter, another sign of a steadying housing market despite the ongoing COVID-19 pandemic.

As of June 30, 5.7 percent of the single-family loans guaranteed by Fannie Mae were in forbearance, down from the 7 percent that was in forbearance at the end of the first quarter, according to the company earnings released Thursday. The vast majority of the 972,000 loans in forbearance were related to COVID-19, according to the company.

“During this time of economic uncertainty, Fannie Mae is a force for stability, affordability, and liquidity in the housing markets,” Fannie Mae CEO Hugh Frater, said in a statement.

Much of the company’s focus in the second quarter was on mitigation measures to lessen the impact that COVID-19 had on homeowners, which included the suspension of foreclosures and foreclosure-related evictions, as well as eliminating late fees on homeowners in forbearance and offering payment plan and loan modification options.

The data from Fannie Mae shows a steadying housing market, with fewer loans in forbearance and earnings returning closer to last year’s levels, after the first quarter’s significant drop-off. At the end of the first quarter, the company had advised that it expected the number of loans in forbearance to rise, but the opposite occurred.

Still, despite the positive news for the housing market, economic data from the U.S. Department of Commerce showed real gross domestic product in the U.S. dropped 32.9 percent in the second quarter.