Fannie Mae’s earnings have faltered in recent months, as the GSE gears up for an even rougher 2023. The company’s net income fell to $2.2 billion in the second quarter of 2018, down from $3.0 billion in the same period last year.

Fannie Mae’s troubles are part of a larger trend in the mortgage industry, as rising interest rates and tighter lending standards have made it harder for borrowers to qualify for loans. As a result, loan originations have fallen sharply in recent months, and both Fannie Mae and Freddie Mac have been forced to increase their reserves to cover expected losses.

Looking ahead, Fannie Mae expects its earnings to continue to decline in the second half of 2018. The company is also bracing for an even tougher 2023, when a number of key provisions from the Tax Cuts and Jobs Act are set to expire. Unless Congress takes action to extend those provisions, Fannie Mae’s earnings could decline by as much as $6 billion in 2023.

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