Fannie Mae-No Politics (FNMA)

[navycmdr]

Short Takes: Not Happy with Jeb’s GSE Comments
Lame Duck or Not…
White House Leaning Toward Michael Bright
Granite Ramps Up Commercial Commitments

Thursday Dec 7, 2017 ... By Paul Muolo ... [e-mail]



Rep. Jeb Hensarling’s comment Wednesday about his (continued) desire to euthanize Fannie Mae and Freddie Mac didn’t go over well with several GSE partisans in Washington, DC. The Community Mortgage Lenders of America said the Texas Republican’s “proposed course of action” would be harmful to small and medium-sized originators…

One GSE watcher who used to work for the Mortgage Bankers Association dismissed much of what Hensarling said, noting that he’s a “lame duck.” Hensarling will retire from Congress after his term ends. However, if the mortgage industry wants to see a GSE/housing reform bill in 2018 any legislation will have to get past Hensarling, who chairs the powerful House Financial Services Committee…

We understand that it’s only a matter of time before the White House officially nominates acting Ginnie Mae President Michael Bright to be the permanent head of the agency. The previous candidate for the job, mortgage executive David Kittle, got tired of waiting to be nominated and threw in the towel…

Commercial mortgage REIT Granite Point Mortgage Trust said it closed additional senior floating rate commercial real estate loans (commitments) of $252 million in October and November. Granite was spun off by Two Harbors this fall…

[navycmdr]

New CFPB Acting Director Mulvaney Moves Quickly to Intervene in Legal Case

Thursday Dec 7, 2017 ... By Thomas Ressler ... [e-mail]



Under new management, the Consumer Financial Protection Bureau this week took action that may be a harbinger of a more laissez-faire approach to regulatory enforcement.

In the spring of 2015, the bureau sued Ohio-based Nationwide Biweekly Administration and Loan Payment Administration in federal district court, accusing them of misrepresenting the interest savings consumers would achieve through a biweekly mortgage payment program. The defendants collected roughly $49 million in setup fees between 2011 and 2014, according to the bureau’s account.

This past September, the CFPB got a split verdict in a ruling from the U.S. District Court for the Northern District of California in the case. The agency won a $7.9 million civil penalty from the defendants, but lost on $74 million in sought-after restitution. Claiming financial distress, the defendants asked the court to hold off on collecting the civil penalty.

On Nov. 27, the day Mick Mulvaney assumed control of the bureau, the agency filed a brief insisting that the defendants be required to post a bond if the penalty is delayed. Two days later – reportedly after Mulvaney was informed about the brief by an attorney representing the defendants – the CFPB reversed course.

[Clark6290]

Despite the potential positive developments, the market seems to have little optimism for Fannie and Freddie at this point. Both stocks are down more than 2.3 percent in the past month and are down more than 23 percent year-to-date.

Hundreds of posts in 12 hours fanaticizing about PPS increase. Appears the INVESTING COMMUNITY has made it clear - FNMA still a gamble at best.

[navycmdr]

If Rep. Hensarling Gets His Way, GSE Shareholders Would be Wiped Out

Thursday Dec 7, 2017 ... By Paul Muolo ... [e-mail]



First, the good news: House Financial Services Committee Chairman Jeb Hensarling, R-TX, said he’s ready to cut a deal on GSE reform and is now open to the idea of using Ginnie Mae to be a more active guarantor. The bad news: He wants Fannie Mae and Freddie Mac eliminated, a move that would likely wipe out investors that own GSE common and junior preferred shares.

“The [Hensarling] plan is negative as written for shareholders of Fannie and Freddie as he calls for the companies to be liquidated,” said Cowen analyst Jaret Seiberg in a new report.

If the Texas Republican gets his way, investment firms including Pershing Square and Fairholme Funds stand to lose the millions they’ve invested in GSE common and preferred. Hensarling made his remarks Wednesday during a forum held by the National Association of Realtors.

Of course, it’s early in the process. As reported by Inside Mortgage Finance two weeks ago, the Senate is working on GSE/housing finance reform legislation and Hensarling is still clinging to concepts floated in his past bill, the Protecting American Taxpayers and Homeowners Act.

[Latergater]

Both classes will do great. Was just stating the difference to another poster who said there were none.

[navycmdr]

Why Fannie And Freddie Have A Path To Survival

Wayne Duggan , Benzinga Staff Writer December 07, 2017 12:06pm


Why Fannie And Freddie Have A Path To Survival

Related FNMA

Fannie And Freddie Watch: The Latest News Out Of Washington
How The Pace Of Home Value Growth Compares With The Pace Of US Wage Growth
Fannie And Freddie: Capital Buffer Climax (Seeking Alpha)Related FMCC

Fannie And Freddie Watch: The Latest News Out Of Washington
A Closer Look At Pershing Square's Shareholder Letter: ADP, Chipotle, And More
Fannie And Freddie: Capital Buffer Climax (Seeking Alpha)

While most U.S. companies are hoping for an earnings boost from tax reform,

Federal National Mortgage Association FNMA 1.35%

and Federal Home Loan Mortgage Corp FMCC 1.72%

are simply hoping to survive. According to one analyst, reports on a newly-drafted Senate housing finance reform bill are good news for Fannie Mae and Freddie Mac investors.

The Analyst

Height Securities analyst Edwin Groshans.

The Thesis

Groshans says the current draft of the housing finance bill allows Fannie and Freddie to continue to exist in conservatorship until other competitors enter the MBS guarantee market.

“This development is a positive for GSE shareholders and we have an encouraging outlook on the probability of passage of a bill as Treasury Secretary Steven Mnuchin, Senator Bob Corker (R-TN), and House Financial Services Committee Chair Jeb Hensarling (R-TX) appear to be working together to develop or support bipartisan housing finance reform legislation,” Groshans wrote Thursday.

Details on the bill are still unknown at this point, but Groshans said it appears as if Fannie and Freddie may be allowed to exit conservatorship at some point down the line. Treasury Secretary Steven Mnuchin has said housing finance reform will be a top priority of the current administration in 2018.

In November, Bloomberg reported the Treasury has been discussing having Fannie Mae and Freddie Mac retain a portion of the fourth-quarter dividend payments in an effort to begin recapitalizing the government-sponsored enterprises.

Fannie and Freddie have about $7 billion in dividend payments due to the Treasury by the end of the year, but Bloomberg reported they may be allowed to retain $2 to $3 billion, another positive step for Fannie and Freddie investors.

Price Action

Despite the potential positive developments, the market seems to have little optimism for Fannie and Freddie at this point. Both stocks are down more than 2.3 percent in the past month and are down more than 23 percent year-to-date.

[FreeFNMA]

both him and Corker are not seeking reelection. Not sure why that are working so hard on this right before they leave but who knows. they are enemies of the GSE's

[jog49]

I'm betting that does NOT turn the markets upside down!

[stockprofitter]

LOL - I did the EXACT OPPOSITE

[HoldenWalker99]

Sold remaining common shares... was 80%/20% preferred/common, now 100% preferred... I think common still a decent bet from here, but it's going to take a while. Too many preferred vs. common benefits.

Good luck to all.

[stockprofitter]

GREAT QUESTION LOL

[jog49]

....but only in liquidation proceedings. Who is it that you know that's being liquidated?

[stockprofitter]

BUY low SELL high

[QueenVic]

https://www.benzinga.com/analyst-ratings/analyst-color/17/12/10886250/why-fannie-and-freddie-have-a-path-to-survival

[stockprofitter]

Preferred PUMP AND DUMP by the masters of illusion.

[Latergater]

From the news last night. You can connect the dots on the rest. “Under the proposal, preferred shareholders of Fannie and Freddie could be made whole or close to it, depending on the final outlines of the transition, the people said. But common shareholders may not fare as well, they said. Whether and how shareholders get compensated in the transition to the new system is still an open question. Investors in the companies include several prominent hedge funds.”

[stockprofitter]

True, but only applies if FNF BANKRUPTCY

[Latergater]

False. A preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock

[stockprofitter]

Just because they are "called Preferred" doesn't actually mean they are better.

[Letgoofmyfannie]

Ridiculous, no "hedgie" will drop a suit based on this news. No one drops a suit due to "hope", especially from the poison pen of a Joe Lightweight.

[streamer04]

pfd shares will always get the upper hand/better deal. Thats why they're called pfd.

C'mon people, this isnt rocket science.

[BaGr]

Pretty sure it can be a rider.

[HoldenWalker99]

Speculation was reverse?

There was no instance in the history of the world in which common get made "whole" and preferred get screwed.

[stockprofitter]

It still is. COmmons have NO CEILING

[wil318466]

Speculation that the prefs get made whole and commons get screwed. It's just speculation, the reverse was the sentiment for quite a while.

[streamer04]

This is a quote from "neo" on the google groups board. This guy absolutely nails it in my opinion.

"Looks to me as if the plan is a ploy to bait hedgies in preferred shares to drop their suits - use all the court losses & the lack of remaining suits as ammo to raid the common shares & write legislation which benefits banks at the expense of FnF & common shareholders... time will tell

The Courts have failed in the big picture goal...knowledgeable brave judges could have forced legislators to do put things right in most repects, but their lack of financial expertise and willingness to call out corruption will be devastating to commomers if warrants go through & pieces of company are legislated away"

[Donotunderstand]

??

continue to pay a ton for NWS but not the small amount to ...?

how is that logical?

?

[yambike]

"GSE jumpstart reauthorization act of 2017"

-Contemplates continued NWS to 2019.
-Also tells FHFA to no longer contribute to housing trust fund. Watt used this argument as a pretext for some capital retention.

Being a novice in regards to congressional procedures, I was wondering, is this a separate motion or can this be attached to the something else like the tax bill or debt raise?

Bradford was celebrating expiration of jumpstart before it happened. Another "moved the couch" moment. Premature celebration.

[Donotunderstand]

I think you posted that a year ago

[Latergater]

https://twitter.com/donotlose/status/938581593756782593

[kip128932156]

Another try to jumpstart bill 2019.. smh.
https://mobile.twitter.com/RobTVDC/status/938770149901029377/photo/1?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fhowardonmortgagefinance.com%2F2017%2F11%2F30%2Fthe-economics-of-reform%2F

[Red Captain]

Ah so this explains the issue.

Thank you for posting this. If you could link the source even better!

[IL Padrino]

Ummmm,
What kind of nonsense is that???? Difficult???? What in the world have they been doing the last 8 years?

It seems to me they want to keep punting the political football at each other in order to keep the dividend payments going. Reform, as we all know, has been slowly happening little by little. The GSEs have fixed a lot of the loopholes that allowed subprime lending debacles and have reigned that in.

[Red Captain]

Sure the market overeacts, but this imbalance is extremely strange.

I mean the pref are still up some 25%, and yet common is down a penny or two at the time of writing.

What in your opinion is causing this yuge(tm) discrepancy?

[cfljmljfl]

There is a takings ..... taking profits to pay affordable housing . How the floss that legal ?

[matmlg]

The senators haven't even seen the average joke plan.

[streamer04]

my friend, you are living in deep denial if you think the pfds are a bad deal.

[stockprofitter]

Lol.

[Latergater]

“Under the proposal, preferred shareholders of Fannie and Freddie could be made whole or close to it, depending on the final outlines of the transition, the people said. But common shareholders may not fare as well, they said. Whether and how shareholders get compensated in the transition to the new system is still an open question. Investors in the companies include several prominent hedge funds.” Common will go up from here. Just a question as to how high. Not pre conservatorship levels though and definitely not 1,000.

[JosephS]

Are the prices on the pref up today? What happened?

Are the 3 common pumpers still calling 1000?

Not a recco

[HoldenWalker99]

Corker's incentive - pride and $$$.

Mnuchin told him that he'd act administratively to restore GSEs which would make Corker look like an idiot. Knowing this and that wind down/replacement was difficult politically, Corker switched his tune... and likely investing millions in GSE preferred shares while doing so.

Wake up. It's crystal clear.

[Clutch29]

Good signs today and alot goin on in the hearings that feel really positive

[HoldenWalker99]

Preferred pump and dump... except I'll be dumping near $25 and $50 par value.

[CatBirdSeat]

Yes! This is what a preferred share pump and dump looks like.

[camaro4me]

It's okay, this is what rotation looks like on otc. You're witnessing history here.

[navycmdr]

GSE LEMMINGS doing what they do - OVER REACTING ...

FEAR & GREED

LOOK at the BIG PICTURE - not the misperceptions of the LEMMINGS

FACT - the GSEs ARE NOT GOING ANYWHERE

NO PLAN has been Adopted ... DETAILS HAVE NOT BEEN DECIDED

BIG PICTURE - they are finally GOING to GET GSEs OUT of GOVT CONTROL

what is the common FACT ? ... the GSEs ARE HERE TO STAY !

RECAP and RELEASE !

imo- BOTH Common and PREFERRED will BENEFIT HUGE

arguing about which is better is irrelevant & A WASTE of TIME

[Latergater]

Stop! Pure fiction thag this point. The senators are not discussing the average joe plan.

[QueenVic]

https://finance.yahoo.com/news/rates-rise-across-board-150000606.html

[JosephS]

Yeah. We are all just fumbling around in the dark. Maybe I will bump into Cindy Crawford, though..

[stink stack]

I didn't hold this for six years to sell now! All or nothing! BOOM!!!