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American mortgage giant Freddie Mac shared its financial results for the second quarter of 2022.
Among the highlights of the release of the result, the government-sponsored enterprise noted that its net income was $2.5 billion in the second quarter, down 33% from the same period last year and down from $3.80 billion in the first quarter.
Freddie said the decline was primarily due to a loan loss provision of about $300 million in the 2nd quarter due to “portfolio growth and deterioration in forecasted economic conditions.”
The mortgage giant’s net worth rose from $31.7 billion in the first quarter to $34.1 billion in the second quarter.
Its total mortgage portfolio was $3.3 trillion. Continued mortgage portfolio growth and higher guarantee payments helped stabilize non-interest income at $4.8 billion.
However, non-interest income fell by $1.1 billion, leading to an 8% year-over-year decline in net income ($5.4 billion).
The GSEs reported a net income of $2.2 billion in single-family businesses and $0.3 billion in multi-family businesses.
Freddie Mac’s new family business activity slowed 52% year-over-year to $138 billion as refinancing plummeted due to higher rates. Meanwhile, new multifamily business activity grew 15% year-over-year to $15 billion.
“During the second quarter, Freddie Mac delivered strong financial results and continued to build equity capital to withstand potential economic stress,” said Freddie Mac CEO Michael DeVito.
“We’ve helped 617,000 families buy, refinance or rent a home and introduced innovations that allow borrowers to simplify the loan underwriting process and improve risk management.
As rising mortgage rates, home price appreciation, and other economic factors challenge affordability, we’re committed with work in this sector to promote fair and sustainable housing across the country.
Fannie Mae also recently released its second quarter financial results. It posted a net income of $4.7 billion, and a first-quarter profit of $245 million.
The company’s net worth reached $56.4 billion.
“Our strong second-quarter results reinforce our financial strength and we remain focused on managing risk and delivering on our mission of providing sustainable and affordable financing for the benefit of those who rent and own their homes,” said David Benson, Fannie Mae’s president, and interim CEO.
Reference Source: MPA
