Fannie Mae reported strong earnings for the first quarter and it benefited from high demand for its foreclosed properties and higher sales prices.
The GSE sold nearly 43,000 foreclosed properties in the first quarter at a price equal to 65% of the unpaid principal balance of the loans, up from 56% a year ago. (Fannie factors in marketing and repair costs in the sales price.)
“The increase in sales prices contributed to a reduction in the single-family initial charge-off severity rate to 27.2% for the first quarter from 33.4%” in 2Q12, according to the company’s 1Q securities filing.
Fannie ended the first quarter with nearly 101,500 REO properties on its books after acquiring 38,000 REO properties during the quarter.
“Our goal is to sell to owner occupants as often as possible and we do that through first look, repairing properties and maintaining them to make sure they are good homes for people to move into and live in,” said Fannie spokesman Andrew Wilson.
When Fannie puts a REO property up for sale, it gives homebuyers a “
The increase in sales prices also meant the GSE didn’t have to increase its provisions for single-family credit losses.
“We recognized a benefit for credit losses of $975 million in the first quarter for 2013 compared with a provision of credit losses of $2 billion in the first quarter of 2012,” according to the 1Q securities filing.
