Fannie Mae-No Politics (FNMA)

[Newyorktrader2017]

What is the probability of this Bill passing and getting enough votes?

[ease2002]

From a Common Shareholder perspective, I’m not sure I care if TBTF enter into the secndary market via Watner/Corker II as long as a equity stake is converted from FnF to the new companies. Seems like the community bank people are nervous ... Not sure FnF shareholders truly care.

[kip128932156]

No clue. Who is French Hill

Introduced by Representative French Hill, H.R. 4560, the GSE Jumpstart Reauthorization Act of 2017, extends for one additional year through January 1, 2019, the GSE Jumpstart Act. The GSE Jumpstart Act prohibits the sale of Treasury-owned senior preferred shares in government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac without congressional approval and expresses the sense of Congress that Congress “should pass and the President should sign into law legislation determining the future of Fannie Mae and Freddie Mac, and that notwithstanding the expiration of subsection (b), the Secretary should not sell, transfer, relinquish, liquidate, divest, or otherwise dispose of any outstanding shares of senior preferred stock acquired pursuant to the Senior Preferred Stock Purchase Agreement until such legislation is enacted.” The legislation further conserves the GSEs’ capital during periods of low net worth. Specifically, for any period that the GSEs do not make their full required dividend payments to taxpayers (via the U.S. Treasury), the GSEs’ contributions to the Housing Trust Fund would be suspended for that fiscal year.

[Bostonsesco]

Is there support for this or not? And how is it the dummies can write up this kind of crap and have it voted on in less than 30 days yet they cant end the sweep/consevatorsjip in 9 years nor can the judges decide the merits of the cases legalities in reasonable time.

[kip128932156]

On Tuesday HR 4560 will be voted..
https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402782

Towards end of link u will see a picture of Jeb. I suggest printing his picture out and putting it on a wall. And get hold of darts. LOL

[Pecker9Wood]

Need not too pay attention too bad children as him. Show boating too attract attention to himself. The twins are on a path and execution of their plan continues. As the GDP grows the government will become less dependent on the sweep and the execution of the conservatorship will be done and left to their own means too grow the economy. The revenue from shareholder activities will assist and that is a resource that will not be ignored.

[MannSinger]

Failed Stupidest Idea: Divide GSE or TBTF banks

TBTF pushed to divide GSE into residential and rental business of GSE.

Benefit of Non-split GSE: If rental business goes down then residential business goes up and vice versa. In order to both businesses to survive they need to be under one company. Dividing GSE will increase overhead for both businesses and hence mortgage rate will go higher for both too. Splitting to remove impact of size is NOT the solution. They need to be regulated well.

TBTF Banks: If splitting is the good idea then Gov should split TBTF banks in to seven businesses- consumer banking, residential lending business, commercial lending business, rental lending business, residential MBS business, commercial MBS business and investment banking. If you do this all divided businesses will fail.

Dividing GSE is the stupidest idea pursued to implement and Billions already spend in separating IT and other infrastructure at GSE in spite of GSE's objection. Splitting business like GSE or TBTF is not like flipping switches. It will increase

[IL Padrino]

You’re kidding right? Did you see the charts? SMH

[Stockman1010101]

2018 will be a big year for Fannie and Freddie. Their stock price will explode to the up side. I am planing on holding till they hit $100. GLTA.

[Steelhead9]

I KNEW I didn't trust that SOB, Hensarling ... He stuck it to us ...

http://www.valuewalk.com/2017/12/fannie-mae-hensarling-jumpstart/

[ease2002]

Ok, after doing some digging based on the fact that Corker/Warner II has a plan to break up FnF into multi vs single, and then further breakup those two general groups into further subgroups, meaning companies, based on the following link dated 6/27/17:

https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/27/republican-democrat-fannie-mae-freddie-mac.html

And the fact that Mnuchin has obviously been kept in the loop by Warner and Corker (probably helping with framwork) and these guys want to enact reform that can pass and get reasonable buy in from lobbysts and general public. Mnuchin and by default Trump do not want to act unilaterally as any blame or faults would lay at their doorstep.

So since the latest Bloomberg article confirming Warner/Corker II that has been in the works for many months, and has had input from Mnuchin, Treasury & Warner/Corker may be getting to a point where they may be benchmarking FnF to breakup the companies like the utilities were in the 20th century.

This way no one, or two in this case, company monopolizes the secondary mortgage market. Shares from FnF are replaced with a benchmarked conversion of many shares in many different/smaller FnF companies that attract significant private capital as the first layer of risk. Treasury can essentially convert the warrants and spread them over all the companies. Ginnie Mae then backs the FnF small companies and the “bad day” fund begins to be capitalized via mortgage fees.

Even Hensling could say he helped end Fannie and Freddie, although really they would’ve been broken up into smaller companies to diversify the risk better.

Lastly, there would be essentially three layers of protection for taxpayers - FnF brokenup companies, Ginnie Mae, and the “rainy day” fund. And shareholders rights would be honored by converting equity in FnF into smaler FnF companies for diversification and competition.

All IMO

[ease2002]

Well, IF they are attempting to rush a “solution” through with Warner/Corker/Mnuchin and FnF are to continue to exist, then they may need to benchmark the common shares for a type of conversion. No time like the present with 3 bucks being the benchmark. Just some basic speculation.

[FreeFNMA]

They are scrambling to do something!!!

[Dg1964]

Hensarling is already acting like a lobbyist. IMO- He is acting like the head of the Mortgage Bankers Association. Stevens is stepping down on Sept 3oth- my guess he is the new guy.

[401kobessive]

That has been my understanding all along. They became slush funds.

[ClayTrader]

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

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

[eltatriton]

For those asking me for 'evidence' that Ackman added more FNMA in September:

I won't post the link, but if you look up FNMA on CNN Money, click Shareholders, click Institutional ownership, then scroll down and you'll see that he added almost 45 million shares to his mutual fund in the last quarter, bringing the dollar value of his stake in FNMA to over $500 million across his funds.

To me, for a guy (Ackman) that's being currently sued for insider trading, to add a $145 million position to an already $360 million position while praising a Senator who's been hostile to shareholders and giving major hints he knew about him writing a fresh bill for reform, says a lot.

[yambike]

The law of the land is so massive with many conflicting precedents and rules. Courts can pretty much pick and choose whatever verbiage to fit their ruling.

Yeah, yeah, so they say "full administrative record" for DACA ruling.

I fear they will cite "adminstrative privilege, definition of "may", "not going to second guess decisions made during crisis" etc when they rule against us.

Very disillusioned by the whole process thus far. Until a court actually uses common sense to make a ruling, I wouldn't put much weight on this DACA ruling.

The rule of law really is tired apparently.

[eltatriton]

While I agree with what everything else you said, I'm going to say you're wrong about 95% of people not knowing who Corker is. Corker has gained the pubic spotlight months ago for insulting the POTUS and being a obstructionist when it came to voting for the tax reform. Remember, this is a guy who was under the spotlight before then, despite being ON RECORD ON TV for telling people to short F&F. He's as crooked as they come in terms of Senators, but people wouldn't be grilling him unless someone came out from 20+ years ago and said they were groped by him.

[kip128932156]

Mark Calabria..
https://poseidon01.ssrn.com/delivery.php?ID=457081120069122071119096007016123119032082066008011028071025023011060053062124010044097005043034074030046107101069119011105070066069084040028071103022078111120065113007009068067025088125069099004127103015086104096078127&EXT=pdf

[TheDon3]

So I just reread the gse jumpstart language and it says that a court ruling can override the current gse jumpstart in place. This got me thinking and asking myself, does the current bill mean a court ruling in the sense that a case goes to trial and a judge makes a decision or is a settlement also included in this? If my thinking is correct they can't have any settlement until jumpstart expires because a settlement isn't a court ruling? Or am I wrong?

[JosephS]

Nice piece. Well written!

[955]

WHOA! Now that's a precedent we could ALL live with! Does anyone think SCOTUS was thinking of the F&F court cases when they granted the stay?

“Judicial review cannot function if the agency is permitted to decide unilaterally what documents it submits to the reviewing court as the administrative record,” Breyer added in the dissent. “Effective review depends upon the administrative record containing all relevant materials presented to the agency, including not only materials supportive of the government’s decision but also materials contrary to the government’s decision.”

[10bambam]

Beacon Journal/Ohio.com editorial board: Capital idea for Fannie and Freddie

Published: December 8, 2017 - 8:24 PM

 Remember Fannie Mae and Freddie Mac? They were contributors and casualties of the financial crash in 2008, requiring a bailout from the federal government totaling $187.5 billion. The rescue also involved placing the government-sponsored enterprises in conservatorship under the Federal Housing Finance Agency.

This government regulation has served well. Fannie and Freddie have resumed the role they have played since the 1930s, bolstering the housing market by increasing the availability of credit. They do so in the secondary mortgage market, providing a guarantee, essentially, that makes mortgages more affordable in Akron and across the country.

And yet a hiccup looms at the end of the year. If Congress does not act, Fannie and Freddie will lack the necessary capital, risking trouble across the housing market in the form of higher interest rates and fewer loans available.

The problem goes to the rules set up for the conservatorship nine years ago. Fannie and Freddie faced the task of paying back taxpayers. They have done so — and more, returning $275 billion to the Treasury. The terms have required Fannie and Freddie to route all of their profits to the government, though they have been allowed a capital buffer.

Yet the rules also have set that buffer on a steady decline, and it will expire at the end of the year. Put another way, Fannie and Freddie must keep giving up their profits, but in doing so, they will lack the capital to help stabilize the housing market.

What must Congress do?

Many conservatives have wanted to close up Fannie and Freddie. One line of thought largely blames the two for the housing crisis, arguing they pushed carelessly to expand homeownership. Actually, Fannie and Freddie were followers, taking their cue from a greedy Wall Street, loosening underwriting guidelines, embracing those fraudulent and ruinous mortgage-backed securities.

For years, the door has been open to making improvements in the secondary mortgage market. Congress has yet to move, in part, because the preferred Republican course of relying more on private capital carries its own complications. One involves the likelihood of big banks filling the void, their role growing and the prospect of another too-big-to-fail result.

A better course for now would allow Fannie and Freddie to keep their profits, or at least a share. If that is unacceptable, Treasury could inject new money, though such a step amounts to the same thing, Fannie and Freddie no longer owing money to taxpayers.

To be sure, Fannie and Freddie have a cushion of $260 billion provided by the Treasury. Yet that sum serves more as a backstop against another calamity.

All of this may seem far removed, and some sort of ideological tussle. As it is, Fannie and Freddie are crucial to the management of the housing market, helping to maintain, for instance, the availability of something as popular as the 30-year fixed rate mortgage. Today, the two insure or package two-thirds of mortgages. So, their role goes to daily lives, to an engine of the economy and the largest investment that many Americans make.

Fannie Mae and Freddie Mac, or something similar, have proved their value to the country’s housing market. It is past time to bring them out of conservatorship with the appropriate oversight and regulatory repair work.

If Congress isn’t ready to do that much, and it isn’t, at least permit the capital required to keep performing well in their job.

https://www.ohio.com/akron/editorial/editorials/beacon-journal-ohio-com-editorial-board-capital-idea-for-fannie-and-freddie

[JosephS]

I believe that is quite possible as well.

Not a recco

[JosephS]

At this point, I would assume very little about price. I believe these companies survive and the stocks have value.

[Vancmike]

Great idea! I may do the same.

Pay tax on the smaller amount now and tax free gains in the future.

GLTA

[Mr_Miyagi_9]

Eltatriton...where is evidence that Ackman added in September??? please provide link

[MannSinger]

Will load more into Roth on 2nd if pps is below $5

The fund for 2018 contributions is ready for Roth IRA if nothing happen in December and pps remains below $5.

[Mikey Mike]

Keep the wolves away!

[cfljmljfl]

So all documents in the cship and. 3 amendment should be made available for judicial review to make an inform and just decision. Not as stupid as we believe , courts just selective on policy and process to support their personal ideology ?

[Donotunderstand]

there was one article that suggested Pfd could hit PAR and common would not so well

that common is going down is - IMO - crazy

equity is equity and will have to be treated on a level playing field

my understanding of preferred is that they are preferred in terms of dividends but remain equity

if the news is that F and F are likely to come out of conservatorship - IMO common are worth say a triple or four value from current pricing - even with serious dilution

[Donotunderstand]

Sorry but the regulations were not adequate

Glass Steagall had served the nation well since the depression

Glass Steagall was removed

The banks went crazy and nearly took down the economy

Dodd Frank is valuable but I would trade it for Glass Steagall

[Donotunderstand]

Just to be clear

SCOTUS did not rule on the underlying issue (not sure if before them or will be before them)

SCOTUS ruled to grant a stay

[jog49]

Being the conservator and allowing capital reserves to purposely dwindle to $0 flies in the face of the textbook definition of a conservator and should be a quick, slam dunk in the courts. I see no defense whatsoever of failure of fiduciary and impending liability for putting equity holders in danger of financial crisis because of failure to act.

[955]

again - in the last 12 months - 100% under Dodd Frank - Banks and other Financial institutions have RECORD PROFITS

You've made my point. With increased regulations like Dodd-Frank, what has it gotten us? "Banks and other Financial institutions have RECORD PROFITS." Banks have found a way around the increased regulations. Why? Because the PRIVATE NON-FEDERAL RESERVE, the one entity that could have prevented the 2008 Financial Crisis in the first instance, didn't do their job of reigning in the TBTF banks. Why did that happen? Two main reasons....

1. PRIVATE NON-FEDERAL RESERVE, the banks regulator, is made up of member banks and owned by them. The fox watching the hen house.

2. PRIVATE NON-FEDERAL RESERVE shields their activities from OUR Gov. How many times have we heard Senator Richard Shelby demand more info from the FED? Senator Shelby to Janet Yellen: "We want to know what you're doing and why you're doing it." Oversight of the FED is severely lacking. The FED is not being held accountable to anyone. The ball is getting dropped between Gov and the FED. WHY IS THIS BEING IGNORED BY CONGRESS??? ANS: So they can use Fannie & Freddie as scapegoats, pin the blame on them and collect their profits each quarter to fund their social programs!!! The FED is their feeding trough.

Regulations that were in place at the time of the financial crisis WERE ADEQUATE. Problem was they were never enforced. You can make new regulations until you're blue in the face, but if they are not enforced, what good are they? TBTF banks were given a get-out-jail free card, only to turn around and do it all over again. It is a breakdown of our society in general. Laws are NOT being enforced uniformly across the population. Laws are selectively enforced depending on status. Our justice system MUST be better than that if we are to survive. To think otherwise is the mindset of the globalists who want to exert their power over the populace, the exact opposite of "Liberty and justice for all".

[lushka]

can't argue there but the greatest concern voters have would likely be how they were, are and will be affected personally and in particular, financially. I wouldn't underestimate singular voter intelligence as the democrats recently did in 2016. I doubt people would be pleased at the prospect of their monthly mortgage payments increasing either through difficulty getting a 30 year or being subjected to increase rates. Or worse yet , being unable to buy a home and lose the capital renting.Push comes to shove, sectors of the population care or find it interesting the issues you mentioned,but the majority of the "average Joes" ( not the people you read about or hear about in the "fake" news) will vote with their pocket books in mind and how they were, are and will be affected as individuals and as a family.And giving your money to large Wall st. banks is a negative for most people when other options could exist. Resolving housing finance in a positive way for the middle class and minority groups in the next few months, and well before the mid terms, could be a decisive voting factor and if handled right a bonus for the republicans.

[IronMan123]

What about F&F????? Having to fight like hell to get the same kind of docs.

[IL Padrino]

I understand what you're saying. It's just disappointing all the way around that it's taken this long to do what is cut and dry the right thing to do.
You're left wondering how bad or corrupt the reasons are as to why things are the way they are. It's truly one of the biggest mysteries in govt today.

[fnmaowner12]

From the SCOTUS DACA decision
The justices voted, 5-4, to grant a temporary stay of orders that a San Francisco federal judge issued requiring federal officials to provide internal legal analyses, studies and other materials the administration gathered in advance of the decision announced in September to wind down the program known as Deferred Action for Childhood Arrivals, or DACA.

All the Republican-appointed justices backed the stay, while all the high court’s Democratic appointees joined a 10-page dissent authored by Justice Stephen Breyer.

“Judicial review cannot function if the agency is permitted to decide unilaterally what documents it submits to the reviewing court as the administrative record,” Breyer added in the dissent. “Effective review depends upon the administrative record containing all relevant materials presented to the agency, including not only materials supportive of the government’s decision but also materials contrary to the government’s decision.”

Amen brother.
https://www.politico.com/story/2017/12/08/supreme-court-daca-dreamers-protections-288620

[schaub]

You’re dealing with the Government, so NOTHING looks objective. Just the same BS, until someone grows a pair.

[Rumpel]

Nah. The typical voter cares more about whether or not a baker has to make a cake for a gay wedding, or whether a guy grabbed some female's ass 25 years ago, than delve into the intricacies of housing. Half of them don't know who the Vice President is, and probably 95% don't know who Corker is...

[Rumpel]

Eltatriton, How much did he add in September?

[Letgoofmyfannie]

Who is going to do this "enforcing"? Having been a Fed in enforcement for ten years I can tell you that it takes troops with their boots on the ground. The current environment is eliminating regulatory headcount. Talking about enforcement is one thing, doing it is another.

[Donotunderstand]

yes
we agree
and I agree with Mnuchin

all income gathered by the GOV funds GOV programs

I simply said the CSR income - less than 10B -

1. Goes to the same pot as all other income
2. In size is so tiny relative to 600B of deficit and Trillions of spending that it is not even a rounding error

[IL Padrino]

Not according to Mnuchin. He specifically said in the Bartiromo interview that the GSE dividends were used to fund gov't programs. I'll take his knowledge on the subject at face value.

[Rumpel]

The news does NOT look great for us, if you look at it objectively.

[Donotunderstand]

reduction of deficit per year marches on post stimulus

https://www.bing.com/images/search?view=detailV2&ccid=ubdlBovt&id=C4BB4B41F64A37B52E9D95E1D7C2D7C5163D271F&thid=OIP.ubdlBovtTRPBBVpr4J1E6QEsEG&mediaurl=http%3a%2f%2fsi.wsj.net%2fpublic%2fresources%2fimages%2fNA-CG479_BUDGET_9U_20150713140009.jpg&exph=612&expw=700&q=annual+deficit&simid=607992887993173199&selectedIndex=0&qpvt=annual+deficit&ajaxhist=0

[Donotunderstand]

While - post stimulus - we have been reducing our annual deficit via massive growth for 80+ months and the Republican cuts ... we still lose about 600B a year

Sorry but there is not shock to the budget from 10-20B

think about 100+Billion of hurricane relief - that may grow to 200B

sorry but no such bump or consideration is on the table

(and the amount you talk about is ONLY the CSR the rest is inside the budget no different than Defense. The amount is about 7-8 B a year based on the work of Alexander and Murray to legislate that line item)

[Rumpel]

Sure. The Feds never screw the little guy. Puhleeeeeeese!