Fannie Mae-No Politics (FNMA)

[navycmdr]

Short Takes: The Little Guy Gets a G-Fee Break
A Coming Spike in G-Fees ?
More Financial Maneuvers by Radian
A Hot Streak for Non-Agency Prime MBS
A Stock Market Crash Warning from Treasury Secretary Mnuchin

By Paul Muolo, Brandon Ivey ... [e-mail], [e-mail]



When it comes to guaranty fees charged by Fannie Mae and Freddie Mac, “extra” small lenders got a break in 2016, according to a new report from the Federal Housing Finance Agency. The agency said this group paid 55 basis points in 2016 compared to the 57 bps paid by the top five GSE seller-servicers. A difference of 2 bps is not a lot and extra small lenders rank beyond the top 100 sellers to Fannie and Freddie, but money is money…

The FHFA report notes that it has asked the GSEs to establish g-fees that are “consistent with the amount of capital they would need to support their guarantee businesses if they were able to retain capital.” Fannie and Freddie are allowed to retain $600 million in capital for 2017 and zero for next year. Might this suggest that g-fees charges could spike next year when zero hour comes?...

Not only did Radian unveil another hit to its “services” division Wednesday morning, but it announced a $225 million loan with Royal Bank of Scotland and a $450 million debt offering. The debt, in the form of senior notes paying a yield of 4.5 percent, follows an earlier debt buyback program. Radian is trying to reduce its reliance on notes where it has to pay interest rates of 5.25 percent and higher…

The hot streak of prime non-agency MBS issuance is set to continue: JPMorgan Chase is preparing a $911.0 million security, AIG a $638.1 million deal, according to presale reports from Fitch Ratings. Flagstar Bank also is working on a transaction as well, according to documents filed with the Securities and Exchange Commission.

THE STOCK MARKET CRASH OF 2018 (IF): Treasury Secretary Steven Mnuchin said Wednesday that if Congress doesn’t pass President Trump’s tax overhaul plan, stocks will be in for a bit of correction. On a Politico podcast, the former Wall Streeter said markets have “baked into it, reasonably high expectations” for a significant corporate tax cut, helping to boost stocks to all-time highs. But if a tax bill were to fail, he expressed the belief that things might get ugly: “…there’s no question in my mind that if we don’t get it done you’re going to see a reversal of a significant amount of these gains.” If stocks correct (crash) it stands to reason that bond prices will rally and interest rates could plunge, which might set off more refinancings of home mortgages. Then again, if equities tank, plenty of people who make their living off of stocks and related industries will lose their jobs, which will cause trickle-down pain throughout the U.S. economy. And maybe home prices will tank too. Or maybe not.