Freddie Mac Records Profit of $7 Billion

Josh Fraser Mar 12th, 2021 / Earnings, Quarterly Earnings, Freddie Mac, Profit, Industry News

On 11 February 2021, United State’s second-largest mortgage lender Freddie Mac announced that its fourth-quarter net income grew to $2.9 billion, a hike of 18 percent from the previous quarter as low rates continue to stimulate origination. 


As per the financial reports of Freddie Mac, the company earned a net income of $7.3 billion for the complete year 2020, an increase of 2 percent, or $0.1 billion from 2019, and comprehensive income of $7.5 billion, down 3 percent, or $0.3 billion from 2019.

The net worth of this housing market supporter corporation rose to $16.4 billion, from $9.1 billion on 31 December 2019. During the pandemic in its earnings call, Freddie Mac heralded its success supporting the markets and even announced that it rose twice its net worth due to the FHFA requirements of the new capital; the enterprise posted $2.9 billion as its net earnings for the fourth quarter, compared to $2.5 billion in the third quarter and $2.6 billion for 2019’s fourth quarter.

Freddie Mac is a government-sponsored enterprise and is listed on the NASDAQ: FMCC. The company is chartered by Congress and buys residential mortgages from savings and loan associations (S&Ls), banks, and mortgage bankers on the secondary market and shares for sale on the stock markets.

Freddie Mac also quoted that they delivered record liquidity of $1.2 trillion at a crucial time, assisting 4.6 million families in refinancing, purchasing, or renting a home. This was also the first call between the regulator of Freddie Mac, The Federal Housing Finance Agency (FHFA), and The US Department of the Treasury since the January 14 agreement, which enables it and Fannie Mae to keep more of the capital with them.

The impactful role of supporting the housing market under all economic circumstances was performed well by Freddie Mac, for which it was established. They have created record liquidity, allowing millions of borrowers to purchase or refinance homes at extraordinarily low-interest rates in view of the global pandemic-induced economic uncertainty.

The company announced net sales up 18% to $16.7 billion year over year, presumably propelled by an 8% rise in net interest income to $12.8 billion. Not unexpectedly, in the single-family warranty portfolio, Freddie Mac attributed much development to a 17 percent leap. According to Freddie Mac's earnings report, a clear impact of the COVID-19 pandemic was witnessed as the credit-related expenditures soared to $2.3 billion in 2020 from $200 million in the previous year.

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