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This is a big article, Maxine Waters is a representative on the Financial Services Committee in congress and she has been very pro Fannie and Freddie, this article shows that. She's among several outspoken supporters in congress... I'm telling you dude, all signs point to money in the bank. There are no other options to save home ownership than to release them from government control.
Maxine Waters: ‘We are a long way’ from Fannie, Freddie reform
WASHINGTON (MarketWatch) — It’s been almost seven years since mortgage-finance giants Fannie Mae and Freddie Mac were placed into conservatorship, and U.S. lawmakers have yet to pin down how to reinforce the housing market’s infrastructure, without disrupting sales or putting taxpayers at risk.
Discussions over housing-market reform are difficult — the topic is complex and there are fundamental disagreements over the role for government.
“We have not been able to figure it out. It’s just not easy,” California Rep. Maxine Waters, the top Democrat on the U.S. House Financial Services Committee, told MarketWatch. “We are a long way from making any decisions about reform of Fannie and Freddie.”
Proposals to restructure the housing market touch close to the heart of families across the country. Fannie FNMA, +0.46% and Freddie FMCC, +0.48% together back about half of new home mortgages, and no lawmaker wants to be known for getting housing reform wrong.
Meanwhile, some may see inaction as tempting. Because of a bailout agreement with the federal government, Fannie and Freddie have now sent the U.S. Treasury a total of about $231 billion, about $43 billion more than the firms received in aid. This arrangement has led to shareholder suits, which claim that the government is unfairly taking private capital.
Read more: AIG ruling was helpful, says major Fannie, Freddie investor
MarketWatch spoke with Waters about the housing market, the role of Fannie and Freddie and the companies’ regulator, the Federal Housing Finance Agency. This transcript has been edited for clarity and length.
MarketWatch: The U.S. economy and the housing market seem to be recovering without replacing Fannie and Freddie. Since Congress is divided, what’s wrong with keeping the status quo?
Waters: The discussion continues about Fannie and Freddie. There are those who say let’s keep the status quo. And, of course, there are those who say that there have to be some reforms in Fannie and Freddie.
Of course, Fannie and Freddie look pretty good. Not only have they been performing well, but they have paid back all of the money to the Treasury and they continue to earn money. So that makes them look very, very good.
I believe that it is important to have something in place that will ensure that we have a secondary market, something in place to ensure that we are able to provide homeownership opportunities for the average person who is working every day and who can afford to pay a mortgage, people who have demonstrated that they pay their rent on time, they pay their utilities on time.
We cannot leave them to not be eligible for support from something like Fannie and Freddie. So I’m not supportive of those who say the private market can do all of this.
MarketWatch: So you are not ruling out, for instance, keeping Fannie and Freddie in something close to their current form?
Waters: Personally, I don’t rule out anything.
MarketWatch: If home prices fell, if mortgage defaults went up, with Fannie and Freddie unable to keep and maintain a certain amount of capital, doesn’t that mean that eventually that they will have to draw from the Treasury?
Waters: No. As a matter of fact, when you started this conversation, you talked about the recovery in the housing market and how well Fannie and Freddie were doing. I like that conclusion. That’s how we see it.
We see that there is a need for housing in this country. As a matter of fact, I was recently just reminded by my staff that there is a need for about 8 million new housing units and 43,000 of them are in my district alone.
I think the housing market needs to be serviced and that Fannie and Freddie appear to be able to do that. I don’t anticipate Fannie and Freddie accruing such debt that somehow they are going to be in the position where they have to borrow money from the Treasury.
MarketWatch: Your constituents are facing some of the highest housing costs in the country. Do you have federal policies to address their plight?
Waters: Housing prices are determined by demand. If the housing is available, the prices are reasonable.
When you have tight markets and there is not enough housing to serve the needs, the prices are going to go up. So the answer to that is the Housing Trust Fund, for example, that would create more affordable units. The question is you’ve got to develop and create more units for people to be able to rent, and, of course, the same thing with the housing market.
The federal government, as a matter of fact, can only help meet the demand through support for housing through ways like we’re describing – the [Federal Housing Administration], or whether it’s a housing trust fund, etc.
MarketWatch: In fiscal 2014, the U.S. Justice Department recovered $3.1 billion for false claims on federally insured mortgages and loans, and many big lenders say this is one reason they are skittish to make FHA loans. Has the DOJ been too aggressive in pursuing mortgage lenders under the False Claims Act?
Waters: No, as a matter of fact, the DOJ has a responsibility to protect the taxpayers’ money. So whatever they do to ensure that false claims are dealt with is what we expect them to do. It’s not a matter of being too aggressive. It’s a matter of simply doing your job.
MarketWatch: What can Congress and the rest of the federal government say to lenders to encourage them to ease standards and to lend more?
Waters: What you need in order to expand homeownership is secondary markets. You really do need, No. 1, lenders who are prepared to now follow the Dodd-Frank rules and to have qualified mortgages for people who demonstrate the ability to repay. For those who are initiating those loans, if they need to have support in the secondary markets for those loans, they need to have a place to go. Fannie and Freddie have been that place. So that’s what we need. We need support by our government to ensure that average working middle-class people can afford homes.
MarketWatch: You have repeatedly called for principal reduction on mortgages. Are you disappointed that the FHFA’s current director, Mel Watt, has not embraced principal reduction?
Waters: We are waiting to see what Mel Watt is going to say. I still support principal reduction, and I am hopeful that he is going to announce what he’s going to do about that sometime very soon. I have not yet concluded that he is not going to do it. He has not done it to date, but I support principal reduction.
MarketWatch: If he announces a plan that’s very targeted, very niche, for only a certain set of borrowers, what will your thoughts be on that? Do you think there needs to be a more far-reaching plan?
Waters: A plan should be well thought through. We do have to consider, if, in fact, we have concluded that there were certain targeted areas that were basically solicited for these exotic mortgages and fraudulent mortgages that got them in trouble, I think that certainly should be high on the consideration for principal reduction.
MarketWatch: The nation’s big lenders are pulling back from the mortgage market. Smaller, less regulated, nonbank lenders are increasing their share of lending. Do you think this is a healthy development for the mortgage and housing markets?
Waters: I love community banks being in this business. I hope community banks expand their mortgage possibilities. I have nothing against anybody who wants to play and play fairly. But, of course, it wasn’t the small banks that created the subprime meltdown and the crisis. It was some of our biggest banks.
MarketWatch: And what about the nonbanks?
Waters: I have to watch nonbanks. There’s money in certain areas that should be assisting in the housing markets, but I have to make sure that they are not participating in ways where they have mortgage rates that are too high or other kind of criteria that got us in trouble in the first place.
http://www.marketwatch.com/story/maxine-waters-we-are-a-long-way-from-fannie-freddie-reform-2015-07-09
Will Genworth come back to life?
Traders are apparently looking for Genworth Financial to surge after its next quarterly results.
optionMONSTER's Heat Seeker system Thursday detected the purchase of 3,000 Weekly 8 calls expiring on July 31, mostly for $0.38. This is clearly a new position, as open interest in the strike was only 209 contracts before the trade occurred.
These long calls lock in the price where the stock can be purchased no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $8 through the end of this month. (See our Education section)
GNW rose 2.79 percent to $7.74 on Thursday but is down some 57 percent in the last year. The insurance and financial-services firm has been trapped in an extremely tight range for nearly two months. The company is expected to report earnings just before Friday's calls expire.
Total option volume in the name topped 8,200 on Thursday, nearly double its daily average for the last month. Overall calls outnumbered puts by a bullish 15-to-1 ratio.
http://finance.yahoo.com/news/genworth-come-back-life-111641309.html
Richard X. Bove: Critical Periods In Fannie Mae’s History
http://www.valuewalk.com/2015/07/richard-x-bove-critical-periods-in-fannie-maes-history/
Read all of these and you can slowly piece together their situation. Go to the FNMA board on this website too and you'll get the whole story... Long story short, these are the two biggest companies in the world and the government illegally seized them (the fifth amendment of the constitution says the government has to fairly compensate citizens if eminent domain is exercised, and that didn't happen) and now take all the profits. Any profit from Freddie goes directly to the US Treasury and the government can use it to fund anything it wants. The lawsuits in the courts challenge what they are doing and if and when they are done it will be overturned.... There's also a huge conspiracy about whether or not the bailout was needed and it was all an accounting scheme to make FnF look bad to the public, and the numbers don't lie, they didn't the bailout, that's the third link.
http://www.nytimes.com/2014/02/16/business/the-untouchable-profits-of-fannie-mae-and-freddie-mac.html?_r=0
http://www.nytimes.com/2015/02/15/business/after-the-housing-crisis-a-cash-flood-and-silence.html
http://www.housingwire.com/blogs/1-rewired/post/34280-the-three-card-monty-accounting-of-fannie-freddie-conservatorship
Minnesota Wild get Chris Stewart and Jordan Leopold at Deadline... Currently sitting in 2nd wild card spot in west. Let's go boys let's catch Winny and Cago!
New year, big things coming with FNMA and FMCC, get in while you can!
WHITE HOUSE PETITION FOR RELEASE, PLEASE SIGN!!!
Everyone please sign. We have waited far too long for just compensation, whether or not you just bought shares or went down with the ship in 2008, this is a matter of our government taking far too much power and stepping outside of their boundaries.
Is 100,000 signatures reasonable? I believe so if we get some publicity. At the very least we will see how much more support we have now compared to our last petition. Let's get to 150 and go from there. Once we get 150 we go public on the page and then from there, if we can get picked up in a few articles and best case, a major news station, we are golden and the signatures will come.
https://petitions.whitehouse.gov/petition/release-freddie-mac-and-fannie-mae-federal-government-conservatorship/RmNVw8sB
The good news continues on FNMA... big moves coming!!!!
Minnesota Wild with a big win last night, 4-3 SO win
FNMA still absurdly low in price, investors will win the company back. Good time to get in and hold on tight for the long haul
IFON setting up very nicely, four weeks tight pattern and possible big news on the way, keep an eye out
Another week another trading session awaits. Vikings this Sunday!
Just opened a position in FNMA, two to three years from now ppl will wish they did
BABA- Alibaba IPO coming in September. May be worth investing in. Great profit margins, very profitable company in the forseeable future. Huge market in China.
Twins win 20-6, season all but over but great to see...
Vikings starting soon, Bridgewater or Cassel?
Twolves likely finalize the deal today to send Love to Cleveland
Wild start their cup quest in about a month!
FNMA reports another profitable quarter of billions of dollars. get a little change in there at the very least, don't want to miss the explosion. Could take months, maybe longer, but I am confident it will happen
Another great morning after a Twins win, look for more downward action in the market. GLTA!
technicals and fundementals are on IFON's side, i think your target is very conceivable. I see earnings being very good this report as well with the launch of the tablet during the first quarter of this year. According to "sold out" signs on the retail websites last May/June they were in high demand, should give them a nice boost in units shipped and total revenue, and let's hope net profit
IFON - Beginning of August there was a symmetrical continuation triangle on the bullish side.
A symmetrical continuation Triangle shows two converging trndlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks out above the upper trendline with a noticeable increase in volume, confirming the pattern as a continuation of the prior uptrend.
Pattern Duration 69 days
Target price range Intermediate Term - 4.30- 4.70
FNMA.... All or nothing investment. If you win though, you win massively. If returned to pre-recession prices, we're talking ten bagger
IFON... Great short term opportunity IMO. Earnings are expected in two weeks, fundamentals are amazing, technicals are setting up for a perfect storm and a nice sling shot up.
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