As the leading source of residential mortgage credit in the U.S. secondary market, Fannie Mae is supporting today’s economic recovery and laying the foundation for a better housing finance system. We guarantee and purchase loans from mortgage lenders to ensure families can buy homes, refinance, or rent a good home.
In the past five years, we have taken actions to improve our financial performance, build a profitable new book of business‚ and reduce losses on our legacy book. Fannie Mae’s strong 2013 pre-tax results were driven by continued stable revenues, credit-related income, and fair value gains. Credit-related income was positively affected by an increase in home prices, a decline in serious delinquency rates, and updated assumptions and data used to estimate the company’s allowance for loan losses in 2013. Fannie Mae’s 2013 financial results also were positively affected by the release of the company’s valuation allowance against its deferred tax assets and the large number of resolutions the company entered into during the year relating to representation and warranty matters and servicing matters.
From January 1, 2009 through December 31, 2013, Fannie Mae provided approximately $4.1 trillion in liquidity, which enabled 3.7 million home purchases and 12.3 million mortgage refinancings. We also enabled financing for 2.2 million units of multifamily rental housing during this period.
We are working to establish and implement industry standards‚ develop better tools to price and manage credit risk‚ build new infrastructure to ensure a liquid and efficient market‚ and facilitate the collection and reporting of data for accurate financial reporting and improved risk management.
Ultimately‚ we measure our progress not only by paying taxpayers and improving the housing finance system‚ but also by the difference we make in people’s lives. For example‚ we help families retain their homes or avoid foreclosure – 1.5 million workout solutions, including more than 1 million loan modifications from 2009 through December 31, 2013. We work with mortgage servicers to reach at-risk homeowners early‚ helping them stay in their homes.