Fannie Mae Profit Falls 81% on Huge Virus-Related Expenses
- Firm booked $2.7 billion credit expense largely due to virus
- Mortgage giant estimates 7% of borrowers are in forbearance
Photographer: Johnny Milano/Bloomberg
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Fannie Mae’s first-quarter net income fell 81% to $461 million after it set aside billions of dollars to cover potential credit losses from the coronavirus crisis.
The mortgage giant booked $2.7 billion in credit expenses, triggered by a huge increase in its allowance for loan losses as a result of the economic disruption caused by the pandemic, according to a Friday statement. Fannie said eventual losses from the virus outbreak could be $4.1 billion.