Fannie Mae-No Politics (FNMA)

[JosephS]

I have. I cannot find one court ruling that tossed em. I have searched high and low.

Not a recco

[NobodyFromNowhere]

Hensarling jumped our bones with a new start to wind them down. screwed by the chicken farmer once again

[JosephS]

We need jumpstart to expire and not be extended.

[FreeFNMA]

we need to survive 10 more days and then we go to $5 pps

[ZZ Fannie]

Thanks Joseph -- Appreciate you answering my question. Have a great weekend and Good Luck.

ZZ Fannie

[ClayTrader]

* * $FNMA Video Chart 12-08-17 * *

Link to Video - click here to watch the technical chart video

[ZZ Fannie]

Haha! Next Friday again.

[spotOn312]

$5 by Friday.

[rekcusdo]

That sucks.

[navycmdr]

FHA Unveils New Loan Limits for 2018

By George Brooks ... [e-mail]



The FHA late this week announced new loan limits for 2018, with most areas of the country looking at higher ceilings next year. The higher mortgage amounts are effective for FHA case numbers assigned on or after Jan. 1, 2018.

The FHA ceiling will rise to $679,650 from $636,150 and the floor will increase to $294,515 from $275,665. The floor is set at 65 percent of the national conforming loan limit of $453,100, which applies to areas where 115 percent of the median home price is less than the floor limit.

Any areas where the loan limit exceeds the “floor” are deemed high-cost. Federal law requires FHA to set its maximum loan-limit ceiling for high-cost areas at 150 percent of the national conforming limit.

In addition, the national mortgage limit for Home Equity Conversion Mortgage loans will increase to $679,650 from $636,150. FHA regulations currently do not allow HECM loan limits to vary by metropolitan statistical area or county.

[navycmdr]

Hensarling is Ready to Deal on GSE Reform, but Will it Happen ?

Friday Dec 8,2017 ... By Paul Muolo ... [e-mail]



It appears that Congressional reform of the housing-finance system – and final resolution of Fannie Mae and Freddie Mac – is back on track with a key piece of good news for MBS investors: an explicit federal guarantee on conventional product looks likely.

But now comes the hard part: the details and working out a compromise among elected officials and the industries that will be affected by a new world order for mortgage finance.

Late this week, a key piece to the reform puzzle fell into place when House Financial Services Committee Chairman Jeb Hensarling, R-TX, said publicly he’s ready to cut a deal on reform and is now open to the idea of a broader role for Ginnie Mae, possibly as a successor of sorts for Fannie and Freddie.

For years, as chairman of the HFSC, Hensarling has been a fierce opponent of any type of government guarantee on MBS backed by conventional mortgages, maintaining that the private sector should bear the burden of all risk – and that the two government-sponsored enterprises should be liquidated and their charters retired.

[navycmdr]

What We’re Hearing: President Trump: Wells Fargo Will be Fined President Trump ?
Time to Exempt Fannie and Freddie from the GOP Tax Overhaul ?
Who Lost the GSEs ?
Hensarling’s Change of Heart, Why ?
CMLA Names Former Freddie Official Acting Director

December 8, 2017 ... By Paul Muolo ... [e-mail]



Wells Fargo, the nation’s largest home lender and servicer, will not escape the wrath of the Consumer Financial Protection Bureau for (allegedly) over charging consumers for rate-lock extensions. Who says so? President Trump, that’s who. In a tweet that came mid-morning Friday, Trump tweeted out: “Fines and penalties against Wells Fargo Bank for their bad acts against customers will not be dropped…”

Trump’s declaration was in reaction to a Reuters’ story that said the CFPB might go easy on Wells. (The news organization quoted anonymous sources.) The megabank had come to terms with the agency prior to the recent departure of Director Richard Cordray…

Now comes the big question: Why is the president of the United States weighing in on a bank regulatory issue? Then again, it’s Donald Trump. Mortgage ramifications? Stay tuned…

If the GOP tax overhaul plan becomes law with a 20 percent corporate tax rate, Fannie Mae and Freddie Mac will need to fork over to Treasury an estimated $13 billion to $19 billion (depending on the new tax rate) to cover deferred tax assets currently on their balance sheets. The estimate, which comes from Keefe, Bruyette & Woods, has been out there for months. But now it’s a little scarier for the simple reason that in 23 days, Fannie and Freddie will see their capital buffer fall to zero from $600 million currently…

Of course, tax writers working on the final details of the overhaul could create a legislative “carve out,” exempting Fannie and Freddie specifically from the DTA hit. But as one lobbyist told us, that’s highly unlikely at this point…

If you’re keeping score, the GOP is writing a tax bill – without Democratic input – that will result in the GSEs taking another draw from Treasury next year. The only way for Fannie and Freddie to avoid this is if they can earn that much in the fourth quarter. At this point, that’s almost impossible, though the two did – combined – earn $7.7 billion in the third quarter. However, a nice chunk of that represents a $5.5 billion subprime-related settlement that Royal Bank of Scotland paid to the GSEs this summer…

It’s quite possible that Democrats will blame the GOP for this looming GSE bailout. But will the voters? First, you’ll have to explain to them what a deferred tax asset is…

House Financial Services Committee Chairman Rep. Jeb Hensarling, R-TX, wants housing-finance reform as part of his legacy when he retires from Congress next year, so much so that he finally caved (this week) on the concept of maintaining a federal guarantee on certain parts of the conventional market. At least that’s how his change in attitude was explained to IMFnews…

Someone else who would like to see GSE/housing finance become a reality before he retires (late next year) is David Stevens, president and CEO of the Mortgage Bankers Association…

[navycmdr]

Prospects for housing finance reform ‘brighten’ and may favor shareholders

Published: Dec 8, 2017 12:55 p.m. ET

Bipartisan consensus on one of the thorniest issues left unfinished from the financial crisis ?


Fannie Mae's current headquarters on Wisconsin Ave. in Washington D.C. The agency plans to vacate this building by 2018.

By ANDREA RIQUIER

Prospects for an overhaul of the housing finance system are “brighter” as fresh legislation advances through Congress, one analyst believes.

Senators Bob Corker and Mark Warner are working on a bill to decide the fates of Fannie Mae and Freddie Mac, the two government-sponsored enterprises still lingering in a financial-crisis-era limbo. That question has taken on some urgency in recent weeks as the time nears when the two companies no longer have any capital cushions, as directed by Congress, yet will likely need to tap taxpayer dollars if proposed tax law changes slash the value of tax credits they hold on their balance sheets.

There are still big questions to be determined, and Congress has its hands full with other financial services priorities, wrote Capital Alpha’s Charles Gabriel. Still, he said, some of the broad outlines of the plan that’s emerged seem to be gaining traction and garnering compromise.

“Specifically, we see the shifted Corker-Warner stance toward a continued GSE role and some concessions to shareholders as potentially reducing or removing barriers to reform,” Gabriel wrote late Thursday. “And we thus expect it to importantly change the threshold debate.”

Among the biggest shifts: House Financial Services Committee Chairman Jeb Hensarling’s acknowledgment that he recognizes the political necessity of keeping some form of government guarantee for mortgages.

“Although I hate to have the federal government in the position of deciding which mortgages can be securitized, with $5.7 trillion in guarantees, decide it must,” Hensarling said Wednesday.

The broad outlines of the Corker-Warner plan suggest that Fannie FNMA, -2.96% and Freddie FMCC, -3.55% ’s investment portfolios would be wound down, and future mortgages would be explicitly guaranteed by a government agency led by Ginnie Mae, the agency that currently securitizes mortgages from the Federal Housing Administration and Veterans Administration, with a wrap from a federal mortgage insurance agency that would be created later.

But as Gabriel notes, compromise on the contours of the future housing finance system may be easy compared to untangling what’s owed to shareholders.

Between the 2008 crisis bailout and a 2012 amendment to that agreement, which siphoned the enterprises’ profits to Treasury, shareholders have been nearly wiped out, and years of fighting the government in court have done little to settle the matter.

There are two classes of equity in both companies: preferred and common. Bloomberg and Politico reported this week that the current proposals would boost the preferred shares, but leave the common ones out.

“This messaging seemed puzzling in that it might devalue the government’s own 79.9% equity stake in the two Enterprises,” Gabriel wrote. “But, as some observe, it might be attractive to Senator Corker in settling scores with hedge funds and shareholder groups with whom he has tangled for several years.”

On Thursday, shares of the preferred stocks FNMAS, -4.27% FMCKJ, -4.08% surged while the common class of shares stumbled.

There are still many open questions and constituencies to please before reform is finalized. Earlier attempts at overhauls, including one from Corker and Warner, failed. Even despite the recent momentum, Gabriel thinks there’s only a 35% change of comprehensive housing finance reform next year.

Still, as he wrote, “We think Fannie-Freddie investors may finally be on the verge of seeming less as outliers, which could attract additional capital, from heretofore fence-sitting institutional firms, as well. As for the common vs preferred struggle, we’ll leave it to others to see the future, though we doubt a negative verdict with regard to the former might be that quick or easy to assume.

[Letgoofmyfannie]

"Conservatorism IS the new counter-culture."

-Sure looks that way...Steven likes it:

GSE YIELDS FOREVER

[GSE Loan performance has always been exponentially superior to anyone else’s]

Let me show you how we robbed the GSEs
Their Profits we steal
And no one's gotten hung about it
GSE yields forever.

[The GSE’s continually maintained robust liquidity throughout 2008, right up until the date they were taken over by the US Government, September 6th, 2008]

Fooling the people was easy
They misunderstand what they see

[[The GSEs were adequately capitalized on the date they were taken over by the US Government according to the testimony their Regulator, James B. Lockhart]

It wasn't hard to plant lies in the Media
We're bulletproof now you see...

[The GSEs liquified the mortgage markets after all other private players turned off the credit spigot in 2007]

Let me tell you how we stole the GSE yields
Their Profits we steal
[The GSE’s never needed a government bailout to fund a cash shortfall or operating expenses]

[The Third Amendment sweep to the Senior Preferred Stock Purchase Agreement, which drains the GSE’s of all earnings and equity now and forever in the future, is without legal precedent]

Not one SEC indictment over it
GSE yields forever.

[The GSEs were able to service all maturing debt from ongoing operations before and after the government takeover]

No one in the Media digs up the facts
I mean these journalists are hacks
Or else they can't tell the truth or are just shills
Lawsuits will prove they were had...

[The liquidity crises that defined the 2008 financial crisis were all caused by risk exposures to private label mortgage securitization]


Let me show you how Treasury stole the GSEs
See what they done wrong
You'll want them all hung about...
GSE yields forever.

[The GSEs’ non-cash accounting losses for fiscal years 2008 - 2011, which necessitated draws of taxpayer funds, were entirely reversed during fiscal years 2012-2013…moreover no financial institution or market ever faced any liquidity problems tied to any risk exposure to Fannie or Freddie]

Let me tell you now we're gonna keep the pressure on
Call them out on their wrongs

[Proponents of any type of “reform” to replace the GSEs offer zero empirical evidence that their proposals have ever worked in the past]

And get them all hung about...
GSE yields forever
GSE yields forever
GSE yields forever

[Mr. Capuano questions Mr. Lew on Capitol Hill]

[FHFA operates under a statutory scheme that requires it to support the ongoing financial health of the GSEs. FHFA has no legal authority to do or pursue anything else]

[JosephS]

Does blast email to 600 people count as "contact?"

[BaGr]

You missed Trent Franks.

[eltatriton]

This will drop/pop, rinse and repeat until we get CONFIRMATION of good news. All we've had is speculation so far.

Berkowitz and Ackman knew Corker was working on a new bill (as they mentioned months ago), and that was confirmed two days ago. They put a target on a favorable resolution in early 2018. Knowing how these sorts of timelines always get pushed back, I'd say this is settled in Q2 2018. By summer if I had to guess.

Unless someone has proof that Berkowitz or Ackman are liquidating their positions, I'm going to stay long. These two guys and other hedge funds involved in this have inside information. Berkowitz was involved in settlement talks with the government in 2016. Paulson shut down his HF but kept all his F&F. Berkowitz and Ackman knew about Corker's bill. This isn't Berkowitz buying more Sears, or Ackman trying to save Valeant. They've both made bad calls, but this is a totally different play with different dynamics. It all hangs on whether these get released on conservatorship, whether shareholders are treated fairly, and what happens with the warrants. I'd say Ackman and Berkowitz got guarantees of some sort that their investments will work out somehow. That's why they've stayed bullish all these years, and why Ackman added a lot of FNMA in September.

[NobodyFromNowhere]

my stop loss is at 50 cents. long and strong!

[skeptic7]

Agree 1000%, they haven't stopped the NWS either, but at least it's on their radar, which is exactly the opposite of what GoBama did by trying to hide it from the world. And he did so quite well I might add, that thieving bastard

[skeptic7]

It's an oldie but a goodie.

[Sammy boy]

https://www.insidemortgagefinance.com/imfnews/1_1250/daily/-1000043969-1.html

[ZZ Fannie]

You have NO IDEA how Trumputin feels about the mortgage market because he has NEVER mentioned it since or before taking office. No one knows.

Please show link of the president discussing housing

[redux288]

Trump is not going to let corker screw up the mortgage market

[ZZ Fannie]

So why are you constantly hanging out EVERY DAY on the Common FNMA board?

[detearing]

Corker is a loose-cannon trans-democrat full of lies and deception with an agenda to destroy America. Trump has his number I would think by now and will yank his chain.

[jog49]

"while keeping many of the good reforms that have been put into place by FHFA."

This has to be news to most shareholders. This article is suggesting that FHFA has actually done something over the years. I don't believe a word of it!

[lushka]

that is true! but they can't buy everyone. And people ( "average joe") will be the ones doing the voting come mid term for who takes control of the senate . There will be a lot to be accounted for and a bad mark may be therefor the politicians that voted for the big banks and Wall st. and not for the middle class or small businesses or minority groups on they issue. Of coarse those who are "retiring" don't have to worry!

[JosephS]

Yes. It was shoved into the last omnibus bill in the last 4 months of 2015.

Blaming someone on "cluing them in" is ridiculous. The TBTF banks know every move. Every tactic.

Maybe they dont agree on Omnibus by 12/22/17.

If not, govt shutdown for a week until 1-2-18 could give Watt/Mnuchin time to extinguish Sr. Pref.

They could sell it to TSY for a dollar.

Mortimer would approve

[FreeFNMA]

GSE Jumpstart - Expires In Less Than 60 Days (Nov 6th 2017)

This legislation which is law prevents the US Treasury from selling off its investment in Fannie and Freddie. It was produced by Sen. Bob Corker who has publicly suggested shorting Fannie and Freddie.

This legislation is the hallmark of double speak and actually so far has prohibited/impaled/impeded/thwarted GSE reform. The conservatorship has lasted the better part of a decade and all this legislation did was make it last longer. Bob Corker has since announced that he will not be running for re-election, so when GSE Jumpstart expires it is reasonable to expect that he pulls out all the stops to cripple the GSEs. That said, if Mnuchin is serious about any solution involving the adequate capitalization of the GSEs, the best way to do it while protecting taxpayers involves raising capital in the primary markets and the best way to do this is to settle the lawsuits.

The problem with primary markets right now is who is going to put up billions of dollars with the net worth sweep in place? No one in their right mind. The money would go directly to the government. As such, the only way to attract capital is to eliminate the net worth sweep. This can be done in receivership or conservatorship. Given how the court rulings have largely favored the conservatorship, there really is no operational advantage to entering receivership. Entering receivership also would make it harder to attract new capital.

The SPSPA can be modified in a way that makes raising private capital possible. As GSE Jumpstart expires a plan can be put into place that raises over $100B to capitalize Fannie and Freddie while keeping many of the good reforms that have been put into place by FHFA.

[FreeFNMA]

I really didn't know Jumpstart passed, I thought it failed back in 2015.

Now if that is the case it makes sense Watt and Mnuchin were so robotic in saying they needed a bilateral solution with congress....they had too to conform to jumpstart legislation.

can anyone confirm jumpstart passed?

[whipstick]

and yet both sides have members who are completely bought by the banks..

[whipstick]

lol really? Maybe since they wrote the original they may have the expiry date in their calendar...

[lushka]

Good update article. In reality, if a solution is found through Congress, it would require a"tri-partisan support (democrats ,and both the moderate and conservative republican trenches). Remember, it was not solely the lack of democratic party support that failed the Obamacare repeal, but rather discord within the moderate and conservative views of senate republicans. On that basis,I find hard to believe that the senate would have the votes to eliminate the GSE's and replace them with untested systems especially since the GSE's are working so well presently and I would have to feel by now a majority of the members of Congress understand that the 2008 financial crisis , although multifactorial in its causes, had a lot more to do with the big banks lack of discretion , than the GSE's .Further, I find it hard to believe, with the above in mind, that the Administration would want to wait a full year to see if a tri-partisan resolution can be found . If I were in their shoes ,I would want to get a resolution well before the mid-terms ,so as to favor republican support in the election, especially if their grass root support is at risk with the upcoming tax reform.Thus I doubt they would be in favor of extending the GSE jumpstart another year which would likely mean another year of conservatorship. My "guess" they will try to provide an all around solution, perhaps along the lines of the Moellis proposal and Ackman's presentation but modified. They will have something for everyone and enough for the shareholders that would eliminate and/or substantially reduce the threat of the current or possibly new lawsuits.I suspect the arrangement will be similar to the pre crisis arrangements with the exception that the system will be more carefully regulated. The simplest method would be to have the GSE's survive , be released and continue to play a role.Selling everything out to the big banks ,I think would be a political catastrophe for the republicans.

[yambike]

Doesn't help that Bradford is blaring about Jumpstart v1.0 expiration. Probably clued French and Corker into concocting v2.0

Doh!

[FreeFNMA]

Glen Bradford

what can Mnuchin do while GSE Jumpstart is in place? He can say that he's looking for a bipartisan legislative solution. He can't do anything with the SPSPA or Warrants until that legislation expires on January 2 of next year. Congress leaves DC around December 15. That means Monday December 18th is the first real day that new proposed Legislation can no longer reform them in time for expiration of GSE Jumpstart.

[jacklanvo99]

clean up and cover before he leaves the S.House!

[Patswil]

Very Interesting that Senators Bob Corker and Mark Warner are major players in reforming FnF

[make it or break it]

i think that he meant the 3rd circuit court

[tennis3131]

Delaware-3rd appeal. Years to go. What a crock on a straightforward case. Who can help but be disillusioned with our country. Too many Washington DC capers to keep track of and a judicial system that completely confounds. Where are our Constitutional judges who will stand for clear justice?

Thanks for the updates, Navy. But how maddening!

[Latergater]

Based on yesterday with the heavy down day for common and pfd up big- it seems like it might be the other way around.

[955]

Strict enforcement of existing laws will go much further than increased regulations. Problem is lack of enforcement of rule-of-law as the law was intended, not contorted to meet some previously mis-contrived conclusion.

Senator Grassley pinpoints the problem best when he stated, “Conclusion first, fact-gathering second—that’s no way to run an investigation. The FBI should be held to a higher standard than that, especially in a matter of such great public interest and controversy,” the senators wrote in a letter today to the FBI."

"It is a conclusion not evidence. …I do not make my conclusions first and try to shoehorn the facts to fit my conclusions."

https://www.infowars.com/senator-grassley-lashes-out-at-fbi-doj-in-fiery-senate-floor-speech/

[CatBirdSeat]

Sounds like she was fed the lie from heavy Preferred share holding hedge funds selling their holdings and swapping into common...

[Letgoofmyfannie]

There's still time to read "Bleak House" before this is over, although I think we'll see Hensarling wound down before the GSE's are decided on...

Over at Treasury they are singing a familiar song:

"Leave Our Profit Sweep Alone"

You'd better leave Treasury's Profit sweep alone
You'd better leave our Third Amendment Sweep all alone
Treasury's tellin' you vulture investors
You'd better leave our Profit Sweep alone

Hanky Panky conned Congress said Fan and Fred were in the Red
Geithner made a Third Amendment Sweep left investors all for dead
You'd better leave Treasury's Cash Cow all alone
Well I told vulture investors you'd better leave our Profit Sweep alone!

Waaaah!

HERA hit the Common Investors on the top of their heads
We'll delay in court until all of you are dead
You'd better leave Treasury's Profit Sweep all alone
Well, I told vulture investors, you'd better leave our Profit Sweep alone...

You'd better leave Treasury's Profit sweep alone
You'd better leave our Third Amendment Sweep all alone
Treasury's tellin' you vulture investors
You'd better leave our Profit Sweep alone

You'd better leave our Profit Sweep alone
You better leave...

[jacklanvo99]

Prospects for housing finance reform ‘brighten’ and may favor shareholders

http://www.marketwatch.com/story/prospects-for-housing-finance-reform-brighten-and-may-favor-shareholders-2017-12-08

[955]

Dodd-Frank is massive. Financial institutions have to hire additional personnel to become experts in the new regulations to know and understand the increased requirements to ensure compliance. These experts then have to pass that info to others in the company who then have to ensure compliance while doing their part, a trickle-down affect. THAT is extremely resource intensive. Just ask ANY financial institution, TBTF or otherwise. THAT was the MAJOR complaint of community banks as they do NOT have the resources to acquire that expertise and that leaves them with no choice but to abandon those markets. Just what TBTF wants, a monopoly, which results in higher costs passed on to the consumer, you and I, the taxpaying public. Increased regulation is NOT the answer. Those with deep pockets will ALWAYS find a way around them and control the market. Trump, being a business man, understands this and that is why he is fighting for reduced regulations.

Exactly what about Dodd Frank places a burden on these banks. Give me an example. Curious to know because I have never heard anyone with specifics.

[Latergater]

From that very article.



“There are two classes of equity in both companies: preferred and common. Bloomberg and Politico reported this week that the current proposals would boost the preferred shares, but leave the common ones out. “

[kip128932156]

http://www.marketwatch.com/story/prospects-for-housing-finance-reform-brighten-and-may-favor-shareholders-2017-12-08

[CatBirdSeat]

HOT! -Prospects for housing finance reform 'brighten' and may favor shareholders ! 12:03 PM ET 12/8/17 |MarketWatch

RELATED QUOTES

12:02 PM ET 12/8/17
Symbol Last % Chg

FMCC

2.71 -3.90%

FNMA

2.80 -2.52%
Real time quote.

Prospects for housing finance reform 'brighten' and may favor shareholders By Andrea Riquier

Bipartisan consensus on one of the thorniest issues left unfinished from the financial crisis?

Prospects for an overhaul of the housing finance system are "brighter" as fresh legislation advances through Congress, one analyst believes.

Senators Bob Corker and Mark Warner are working on a bill to decide the fates of Fannie Mae and Freddie Mac, the two government-sponsored enterprises still lingering in a financial-crisis-era limbo. That question has taken on some urgency in recent weeks as the time nears when the two companies no longer have any capital cushions, as directed by Congress, yet will likely need to tap taxpayer dollars if proposed tax law changes slash the value of tax credits they hold on their balance sheets.

Read:Here's what else tax reform means: another bailout of Fannie and Freddie (http://www.marketwatch.com/story/heres-what-else-tax-reform-means-another-bailout-of-fannie-and-freddie-2017-12-05)

There are still big questions to be determined, and Congress has its hands full with other financial services priorities, wrote Capital Alpha's Charles Gabriel. Still, he said, some of the broad outlines of the plan that's emerged seem to be gaining traction and garnering compromise.

"Specifically, we see the shifted Corker-Warner stance toward a continued GSE role and some concessions to shareholders as potentially reducing or removing barriers to reform," Gabriel wrote late Thursday. "And we thus expect it to importantly change the threshold debate."

Among the biggest shifts: House Financial Services Committee Chairman Jeb Hensarling's acknowledgment (https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=402755)that he recognizes the political necessity of keeping some form of government guarantee for mortgages.

"Although I hate to have the federal government in the position of deciding which mortgages can be securitized, with $5.7 trillion in guarantees, decide it must," Hensarling said Wednesday (https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=402755).

The broad outlines of the Corker-Warner plan suggest that Fannie(FNMA) and Freddie(FMCC) 's investment portfolios would be wound down, and future mortgages would be explicitly guaranteed by a government agency led by Ginnie Mae, the agency that currently securitizes mortgages from the Federal Housing Administration and Veterans Administration, with a wrap from a federal mortgage insurance agency that would be created later.

But as Gabriel notes, compromise on the contours of the future housing finance system may be easy compared to untangling what's owed to shareholders.

Between the 2008 crisis bailout and a 2012 amendment to that agreement, which siphoned the enterprises' profits to Treasury, shareholders have been nearly wiped out, and years of fighting the government in court have done little to settle the matter.

There are two classes of equity in both companies: preferred and common. Bloomberg and Politico reported this week that the current proposals would boost the preferred shares, but leave the common ones out.

"This messaging seemed puzzling in that it might devalue the government's own 79.9% equity stake in the two Enterprises," Gabriel wrote. "But, as some observe, it might be attractive to Senator Corker in settling scores with hedge funds and shareholder groups with whom he has tangled for several years."

On Thursday, shares of the preferred stocks surged while the common class of shares stumbled.

There are still many open questions and constituencies to please before reform is finalized. Earlier attempts at overhauls, including one from Corker and Warner, failed. Even despite the recent momentum, Gabriel thinks there's only a 35% change of comprehensive housing finance reform next year.

Still, as he wrote, "We think Fannie-Freddie investors may finally be on the verge of seeming less as outliers, which could attract additional capital, from heretofore fence-sitting institutional firms, as well. As for the common vs preferred struggle, we'll leave it to others to see the future, though we doubt a negative verdict with regard to the former might be that quick or easy to assume.

-Andrea Riquier; 415-439-6400; [e-mail]

> Dow Jones Newswires

December 08, 2017 12:03 ET (17:03 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

[CatBirdSeat]

MarketWatch: 12/08/17 - Andrea Riquier Given AverageJoe Plan & Notified Senators Corker & Warner Have It To Help In Consideration Of New Legislation...

https://twitter.com/nsfraudbuster/status/939152118065217536

[kip128932156]

https://www.nationalmortgagenews.com/news/fannie-and-freddie-should-they-stay-or-should-they-go