Federal National Mortgage AssctnFnni Me (OTCBB:FNMA) was a notable mover during Friday’s trading session rallying by 8% on above average volumes which were 1.4 times the average turnover. The stock witnessed a surge in buying interest after it was able to breach above the resistance level of $1.996. Federal National currently trades below all moving averages, which is a bullish sign. The MACD oscillator is showing signs of an intermediate bullish reversal. The RSI indicator has given a fresh buy signal, which is being seen as a huge positive. Traders believe the stock could trend lower towards levels of $2.131.
New York Federal Reserve Bank denied sale of any mortgage securities by the Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) last week. This announcement came after the Federal Reserve purchased mortgage securities to the tune of $4.138 billion in the November 26 to the December 2 time frame in comparison to $5.974 billion in the prior week.
The U.S. central bank has been utilizing funds generated by principal payments since October 2011 to help the housing market of the nation. Meanwhile the New York Fed also denied selling mortgage securities to Freddie Mac (FMCC.OB) and the Government National Mortgage Association.
3Q15 Earnings
Federal National Mortgage Assctn Fnni Me (NASDAQ:FNMA) released that 3Q15 earnings last month with a EPS $0.04 which was much less than the projections of Zacks Investment Research that pegged the EPS at $0.45 by $0.49. The projection for the next quarter is also not too bright as the mortgage industry is going through some tough times in the recent months in the U.S.
Meanwhile, Zacks cut the shares rating of the company to hold from the previous Buy on November 4. The analyst pegged that the company was not increasing the revenues for some time even though it was a main leader in the mortgage industry in 2015.
Mortgage Market
Zacks said that Fannie Mae was the largest non-bank financial services providers of the world and is especially known to finance home mortgages. Currently the company was working towards lowering the gaps of home ownership through a project called American Dream Commitment that was aimed at increasing the ownership rates by the end of this decade.
Meanwhile, the government sponsored company has been trading down lately and has the support of the United States Congress. It operates as a mortgage market liquidity and stability provider and monitors sale and purchase of mortgage. Some of the work objectives of the company include provision of liquidity of market by securitizing mortgage loans that have been made by the primary market lenders into the securities division of Fannie Mae. The company also dealt in purchase of loans and securities for mortgage. There are three different segments under which the company does business that include the single family, multifamily and capital market mortgages.
