Potential ohne ENDE?
National Mortgage News
Will Fannie Take DTAs Over Several Quarters?
By Brian Collins
MAR 27, 2013 5:14pm ET
Fannie Mae might recognize a portion of its deferred tax assets in the fourth quarter and take the rest of the DTAs over the next several quarters, according to one source who did not want to be identified.
The GSE currently holds $61.5 billion in DTAs in a valuation allowance account. And because Fannie has been profitable all four quarters of 2012, the company can recognize those deferred assets under generally accepted accounting standards.
Initially it was thought that Fannie would recognize the DTAs all at one in the fourth quarter. That is the usual accounting practice.
But that would reduce its life line to the U.S. Treasury, which has been available since the mortgage giant was placed in conservatorship back in September 2008.
If the GSE reverses the DTA allowance all at once, it could substantially reduce Treasury’s $125 billion commitment to cover any future losses reported by Fannie Mae. That’s because the DTA allowance reversal would result in an increase to Fannie’s net worth as of Dec. 31, 2012, which would be deducted from the $125 billion committed level.
“Fannie would be better off to wait until the first quarter,” according to Christopher Wolfe, an analyst at Fitch Ratings.
Under the second amendment to the senior preferred stock purchase agreement Fannie and Freddie signed in December 2009, the net worth reduction expired at yearend 2012.
“If they take DTA in the first quarter or after, it won’t trigger an immediate reduction in the commitment level. The net worth reduction only applies in the fourth quarter of 2012,” Wolfe told NMN.
Due to the unusual circumstances, federal regulators directed Fannie to delay filing its fourth-quarter financial results. Now it looks like Fannie will recognize the DTA allowance over several quarters.
Fannie could file its 2012 annual financial report any day now
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