Penny stock to watch today, Fannie Mae (OTCBB: FNMA), the root of much of the country’s economic crisis and the major contributor the destruction of the housing market, filed its Q4 and full-year 2011 results and filed its annual report on Form 10-K with the Securities and Exchange Commission before the market open.
If you were a victim of the housing crisis and lost your home, you may want to turn off the screen: You won’t believe your eyes.
Net revenues were $4.5 billion in Q4, 2011, down 17% from $5.5 billion in Q3, 2011.
Net interest income was $4.2 billion, down 20% from $5.2 billion in Q3, 2011. The decline in net interest income was due primarily to an out-of-period adjustment of $1.2 billion recorded in Q4, 2011 to correct the rate used to calculate interest income on mortgage-related securities.
For the year, net revenues were $20.4 billion, up 17% from $17.5 billion in 2010.
Dividends Were Paid Out:
The Acting Director of FHFA will request $ 4.571 billion of funds from Treasury on the company’s behalf under the terms of the senior preferred stock purchase agreement between Fannie Mae and Treasury to eliminate the company’s net worth deficit as of December 31, 2011.
Fannie Mae’s Q4 dividend of $2.6 billion on its senior preferred stock held by Treasury was declared by FHFA and paid by the company on December 31, 2011.
In December 2011, Treasury provided the company $7.8 billion to cure its net worth deficit as of September 30, 2011.
As a result of this draw, the aggregate liquidation preference of the senior preferred stock increased from $104.8 billion to $112.6 billion as of December 31, 2011.
It will increase to $117.1 billion upon the receipt of funds from Treasury to eliminate the company’s Q4 2011 net worth deficit, which will require an annualized dividend payment of $11.7 billion.
This amount exceeds the company’s reported annual net income for every year since its inception.
Through December 31, 2011, Fannie Mae has paid an aggregate of $19.8 billion to Treasury in dividends on the senior preferred stock.
OUTSTANDING BANK OF AMERICA REPURCHASE REQUESTS
Fannie Mae makes repurchase requests for lenders to repurchase loans or compensate Fannie Mae for losses sustained on loans that do not meet its underwriting or eligibility requirements, or for which the mortgage insurer has rescinded coverage.
In Q4, 2011, Bank of America (NYSE: BAC), the seller/servicer with which Fannie Mae has the most repurchase requests outstanding, slowed the pace of its repurchases.
As a result of Bank of America’s failure to honor its contractual obligations in a timely manner, the already high volume of Fannie Mae’s outstanding repurchase requests with Bank of America increased substantially.
Measured by unpaid principal balance, Bank of America accounted for approximately 52% of Fannie Mae’s outstanding repurchase requests as of December 31, 2011, compared with 45% as of September 30, 2011 and 41 percent as of December 31, 2010, shortly after entering into an agreement with Fannie Mae to address its then outstanding repurchase requests.
Similarly, Bank of America accounted for 59% of Fannie Mae’s repurchase requests that had been outstanding for more than 120 days as of December 31, 2011, compared with 48% as of September 30, 2011 and 37% as of December 31, 2010.
Fannie Mae is taking steps to address Bank of America’s delays in honoring Fannie Mae’s repurchase requests.
Read the entire report here
Source: Fannie Mae WebsiteShare