FNMA's Profits Set Record
Federal National Mortgage AssociationÛªs profits set a record at $209 million last year as mortgage commitments and purchases soared along with interest rates. Four area bank firms also posted sharply higher profits.</br></br>Earnings for 1978 at FNMA were equal to $3.47 a share assuming conversion of capital debentures to common stock. In the previous year, the Washington company earned $165.1 million ($2.77 a share).</br></br>Known popularly as Fannie Mae, the firm supports a secondary market for home mortgages ÛÓ making agreements to buy mortgages from basic lenders, thereby making more money available lor new mortgage loans. Fannie MaeÛªs business normally booms when interest rates rise and funds become scarce ÛÓ as in 1978.</br></br>Commitments to buy mortgages in 1978 totaled $19 billion compared with $10.9 billion in 1977, while actual purchases were $12.3 billion compared with $4.8 billion. Mortgage-purchase commitments at specified rates are issued for specified periods of time, during which actual purchases take place or the commitments expire.</br></br>Earlier this week, Fannie Mae reported that interest rates at its regular auction of four-month mortgage commitments hit record levels: average yields of 10.674 percent for FHA/ VA mortgages and 11.018 percent for conventional home mortgages.