Freddie Mac recently announced its fourth quarter and full year 2022 results, which showed a year-over-year increase in net income as well as in its portfolio of mortgage-related investments. These positive results were driven in part by record low mortgage rates, as well as increased origination volumes. In addition, the company reported a decrease in its cost of funds and a slight increase in other investment income. All of these developments indicate a strong market outlook for the housing finance industry.
Freddie Mac reported $12.4 billion in net income for 2022, an increase of 79% compared to 2021. This was driven by record low mortgage rates, which lowered their cost of funds, and increased origination volumes, which led to more mortgage-related investment income. The company’s portfolio of mortgage-related investments improved 7% from the previous year, from $1.84 trillion in 2021 to $2 trillion in 2022. Other investment income increased 5%, from $1 billion in 2021 to $1.1 billion in 2022, driven by Freddie Mac’s strong portfolio of investments across public and private debt and equity markets.
Freddie Mac’s strong financial performance was also supported by their Financial Management Group (FMG), which took a number of steps to improve the company’s liquidity position, strengthen its capital position and improve the efficiency of its operations. In the fourth quarter, FMG reported $26.2 billion of total capital, of which $2.9 billion was capital to support new mortgage investments. Additionally, Freddie Mac strengthened its liquidity position by increasing its liquidity reserves to a level that is 41% higher than the same period in 2021.
Overall, Freddie Mac’s fourth quarter and full year 2022 results were driven in part by record low mortgage rates, increased origination volumes, a decrease in their cost of funds and increased other investment income. These positive results suggest a strong outlook for the housing finance industry, and can be attributed to Freddie Mac’s efforts to strengthen its capital and liquidity positions, and improve the efficiency of its operations.
You can read this full article at: https://www.housingwire.com/articles/a-week-late-freddie-mac-releases-q4-2022-results/(subscription required)
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