Donald Layton, CEO of Freddie Mac, says the mortgage industry is running exceptionally well—and it’s improving every day.
“The mortgage industry is a far better run industry. We understand risk better,” says Layton. “We just can’t brag about it that much.”
As of now, the company has returned just under $100 billion to taxpayers—and that’s $27 billion more than it received.
Although Freddie Mac reported a $354 million net loss in the first quarter of 2016, the firm didn’t need to draw from the U.S. Treasury to stay afloat. That’s partly due to the fact that the company has a net worth of $1 billion and a 4th-quarter net income of $2.2 billion.
“Freddie Mac’s first-quarter business results continued to be strong, reflecting our transformation to be a more competitive company. We’re serving our customers better and also more effectively executing on our mission to responsibly support homeowners and renters nationwide,” said Layton.
“The percentage of our purchases of loans to first-time homebuyers hit a 10-year high and we continue to finance record levels of rental housing. Also, the transfer of mortgage credit risk away from taxpayers, which we pioneered, proved its resiliency through the quarter’s significant financial market distress. While the resulting flight-to-quality decrease in interest rates reduced our GAAP results this quarter, an impact which is non-economic in nature, the fundamentals of our business are very solid and continue to improve.”
So what does this mean for taxpayers?
It means fewer hard-earned tax dollars going toward subsidizing federal housing programs—and more money in taxpayers’ pockets.
Has the housing market rebounded? In many places, it has—but experts say to take what you read with a grain of salt. One market doesn’t reflect another, and in some of the hardest-hit areas, growth is slow (and in the worst cases, stagnant).
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