We face one of the most challenging periods for housing finance. The U.S. and the worldwide economy is slowing down. Unemployment and under-employment continue to contribute to the challenges facing families who are trying to make ends meet, while creating a drag on housing and the economy overall. Home prices, which have shown some monthly gains, have not yet hit bottom in many parts of the country, stunting home purchase demand. A bright spot, multifamily housing, is driven by strong fundamentals, as well as a lack of confidence on the part of consumers to purchase homes.
The question for all of us is: What do we do about this?
Let me share what Fannie Mae is doing to support housing and contribute to a sustainable housing finance system for the future. We believe we can help accomplish this by focusing on three priorities.
First, we are providing liquidity to the mortgage market – liquidity that enables homeownership or provides safe, affordable rental housing.
Since 2009, we have provided nearly $2 trillion in liquidity to the mortgage market – more than 40 percent of the single-family market and nearly 35 percent of the multifamily market. Working with our single-family and multifamily partners, this has made it possible for 5.6 million households to refinance into a lower payment and/or a safer mortgage, 1.5 million families to purchase a home, and 857,000 families to secure decent, affordable rental housing.
We have also provided billions in short-term financing for small- and medium-sized lenders so they can continue to meet the demands of their customers during unsettling times, and we have strengthened our underwriting standards. As a result, our new book of business is now 47 percent of our total single-family book.
Second, we are responding to the housing crisis by helping distressed homeowners – and at the same time, limiting credit losses on our legacy book.
Since January 2009, we have completed more than 874,000 loan workouts, including over 600,000 modifications. Last year, we began working directly with distressed homeowners through a network of Fannie Mae Mortgage Help Centers. We now have 10 help centers in hardest hit communities across the country.
We have also created innovative online tools to help homeowners find the right solution, such as:
Third, we are seeking to create long-term value – for the industry, investors, families, and neighborhoods across our country.
Creating value takes multiple threads, whether it is building a strong new book of business that we believe will return value for years to come, helping homeowners and preserving communities while reducing long-term credit losses, or undertaking initiatives that we believe will make our industry and our company stronger for the long-term. Creating value also includes focusing on our people, our processes, and our technology. We want to retain our people and bring in new talent to move us forward, and we are focused on improving our capabilities and creating value for our customers and the industry.
As we look to the future, Fannie Mae is committed to building a sustainable housing finance system for our country.
President and Chief Executive Officer
September 23, 2011
This commentary contains a number of estimates, forecasts, expectations and other forward-looking statements, which are based on our current assumptions regarding numerous factors and are subject to change. Actual outcomes may differ materially from those reflected in these forward-looking statements due to a variety of factors, including, but not limited to, those described in “Risk Factors” in our quarterly report on Form 10-Q for the quarter ended June 30, 2011 and our annual report on Form 10-K for the year ended December 31, 2010.