Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
It would be appropriate after over 13 YEARS of this nonsense, we could regain ownership of our corporation. Or do shareholder property rights only exist in Communist countries?
"Therefore, in order to restore the balance between safety and soundness and mission, FHFA has placed Fannie Mae and Freddie Mac into conservatorship. That is a statutory process designed to stabilize a troubled institution with the objective of returning the entities to normal business operations. FHFA will act as the conservator to operate the Enterprises until they are stabilized."
https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=Statement-of-FHFA-Director-James-B--Lockhart-at-News-Conference-Annnouncing-Conservatorship-of-Fannie-Mae-and-Freddie-Mac.aspx
If they don't get their $3.5T+ social spending package, will that put pressure within the current administration to shake ever penny they can extract from the 'conservatorship' : https://news.yahoo.com/manchin-wants-pause-voting-biden-203302203.html
This is an article from January 2020 by Jared Bernstein (currently in the JB administration), Mark Zandi, and Jim 'salt the earth with the gses carcasses' Parrot:
The nation is in the grip of an affordable housing crisis.
A severe shortage of homes for working-class and low-income families is pushing up house prices and rents across the country, putting homeownership increasingly out of reach for many Americans and making rents so high that it is all but impossible for renters to save. With the presidential election fast-approaching, the candidates should explain what they plan to do about it.
Half of families who rent and nearly one-fourth of home owners pay more than 30 percent of their monthly income toward their housing costs, a level widely considered unsustainable.
After purchasing essentials, including food, clothing and utilities, the families have little left to cover the cost of health care, bridge the gap during a change in jobs or bear an unforeseen bill of any amount. And forget about saving for retirement or a child's education.
Fueling the rapid rise in rent and house prices is a severe lack of housing supply.
Nationwide, the percent of houses that are vacant has fallen to a more than 35-year low, translating into a shortfall of an estimated 1.6 million new houses.
This gap is increasing by about 300,000 units each year, as builders are putting up close to 1.4 million new dwellings yearly, including single-family houses, apartments and manufactured housing. But the yearly demand for new housing, largely from new households and dwellings needed to replace those lost in natural disasters and to old age, is consistently near 1.7 million units.
The entirety of this shortfall is for low- and middle-priced housing. The cost of constructing houses has risen significantly since the financial crisis and builders have struggled to make the economics work to construct housing that most Americans can afford.
The causes
Soaring construction costs have been driven in part by a rise in local government fees and stiffer local zoning restrictions. During the real estate bust a decade ago, real estate prices and property tax revenues evaporated, forcing many local governments to jack up permitting fees to make up the difference.
Add to that often-tight local constraints on where and what one can build, and many of the communities that most desperately need affordable housing have rules in place making that housing almost impossible to provide.
The Trump administration's immigration policies aren't helping, as builders can't find the immigrant workers they need, driving up labor costs in the construction trades, particularly in the South and West, where demand for affordable houses is especially strong. Labor shortages in the transportation, distribution and manufacturing industries are also making home building more costly. And the cost of home building materials has risen sharply, driven in significant part by the trade war and higher tariffs on imported steel, aluminum and other building materials.
To cover these costs, builders have been focused on putting up houses in the top end of the market where they can still make a profit. The country now has a glut of luxury apartments, high-end condos and large residences, and a dearth of workforce and affordable housing.
As a result, in recent years prices for the lowest-priced houses have grown consistently twice as fast as prices for the highest-priced houses and now exceed what many families of modest means can pay.
This wouldn't be such a problem if wages kept up. But they haven't. Recent census data show that while the median cost of rent and utilities is up 13 percent over the past nearly 20 years, median income is up less than 1 percent (both inflation-adjusted).
The widening gap between the growth of wages and the cost of housing has put homeownership out of reach for more and more families, particularly families of color. The homeownership rate for African Americans has fallen to a half-century low.
This in turn is exacerbating the growing wealth gap. In generations past, the primary way lower- and middle-income households were able to build wealth was by owning a home.
More than investing in the stock market, more even than investing in their 401(k) and other retirement accounts, the middle class built wealth through the simple act of paying their monthly mortgage. But with fewer families able to buy a house, and more renters spending so much of their income just to keep a roof over their heads, housing is increasingly more of a drain than a source of wealth building.
The affordability crisis is also undermining labor mobility, another pillar of the American economy. Unlike in much of the rest of the world, Americans have historically been willing and able to move where there is economic opportunity. In today's economy, the best job opportunities are often in the nation's big urban areas, but this is also where housing is least affordable.
Many are thus faced with the Hobson's choice of long commutes, unaffordable housing or forgoing good jobs altogether. Paralyzed by this, Americans aren't moving as much, and our economy is diminished as a result.
And then it isn't hard to connect the dots between the affordability crisis and the mounting problem of homelessness. Homelessness is a complex problem with many causes, but it isn't surprising that the big cities in California and the Northeast have among the least-affordable housing markets and the largest number of homeless.
What can be done
An increasing number of communities, including ones in California, Oregon and New York, are responding to the affordability crisis by imposing rent controls. At best this is a short-term financial salve for struggling renters. At worst it may exacerbate the problem, by limiting the returns to builders and their incentive to construct more dwellings.
What is needed instead are policies that reduce the cost of building houses more Americans can afford. Most obvious is beefing up the tried-and-true programs dedicated to reducing the cost of development, including the Low-Income Housing Tax Credit and the New Market Tax Credit. These tax breaks have proven effective in addressing precisely the supply problem at issue. But instead of expanding them, last year's tax cut reduced their value to developers.
The new Opportunity Zone tax credit, which provides tax incentives for investments in distressed neighborhoods, could also have a meaningful impact on the construction of affordable housing. But officials at all levels of government must do more to ensure that private investors target the neighborhoods that truly need the help.
Tax incentives alone won't be enough, however. The Housing Trust Fund and Capital Magnet Fund, which were established in the midst of the financial crisis to finance more affordable housing, should be scaled up. The Housing Trust Fund provides money to state housing authorities for the development of affordable rental units.
Housing authorities have flexibility in allocating these funds, because they are often in the position to assess how best to address their state's affordability challenges. The Capital Magnet Fund provides financial support to Community Development Financial Institutions and other nonprofit developers for increasing the supply of affordable housing.
Both of these programs have the infrastructure and flexibility necessary to scale up and get affordable housing where it's most needed.
Finally, communities should be given strong incentives to ease overly restrictive zoning and lower high fees for building new houses. Critical federal funds for roads and other infrastructure should be tied to how well communities are addressing their needs for workforce and affordable housing. Community development block grants could also be tied to such metrics.
However, policies to increase the supply of housing will take time to reap benefits. In the meantime, we need to ease the financial pressure on those hit hardest by the affordability crisis.
This means fully funding the nation's primary federal housing voucher program, as currently, three in four families eligible for such rental vouchers can't receive them. It would also make sense to increase the value of the vouchers to provide low-income families the chance to move to low-poverty, higher-opportunity neighborhoods. Doing so has been shown to boost lifetime earnings and open a window to escape poverty.
More than a decade after the housing market took down the economy, the nation finds itself in the throes of a different kind of housing crisis. Its effects are subtler, and perhaps for this reason it has gone largely ignored.
But the nation must address this housing crisis in earnest, lest an entire generation of families whose parents found in housing a critical path to building wealth, find it now blocking the way.
Some of the presidential candidates have put forth plans to address the affordable housing crisis. Indeed, virtually every candidate putting forward a plan has taken on the supply side with admirable muscle. But none have put housing policy at the top of their political agendas.
Given the depth of the affordable housing crisis and the existence of good, practical ideas to address it, it is time for the candidates to give it the attention it deserves.
realestate@washpost.com
Jared Bernstein, chief economist to former vice president Joseph Biden, is a senior fellow at the Center on Budget and Policy Priorities. Jim Parrott is a nonresident fellow at the Urban Institute and owner of Falling Creek Advisors. Mark Zandi is chief economist at Moodys Analytics.
Calhoun seems like the logical political choice but Thompson may further strengthen JB's lock on the African American vote as well as continue his diversity goals in high level government positions.
Either one of them seems likely to push for more affordable housing and focus on promoting racial equality in housing at the gses and may be likely to try to monetize the federal governments financial position in the gses with the cooperation of the UST.
Will Uncle Sugar try to monetize their 'investment' in the gses and move to settle with the shareholders and end the 'temporary conservatorship' that is now in its 14th year?
https://www.mercurynews.com/2021/09/17/what-californias-new-sb9-law-means-for-single-family-zoning-in-your-neighborhood/
https://www.mercurynews.com/2021/09/16/gov-newsoms-office-launches-1-75b-affordable-housing-fund/
https://www.mercurynews.com/2021/09/16/gov-newsom-abolishes-single-family-zoning-in-california/
That's the problem with most of the federal agencies, they typically want MORE POWER AND INFLUENCE OVER THE SLICE OF SOCIETY THEY REGULATE.
Last year, MC INCREASED THE FTE EMPLOYEES AT FHFA BY 18%! Don't worry the regulated industry will pickup the tab not the government...
She might just not have the political savvy necessary for the shark infested waters she would be swimming in. Ed Demarco and/or James Lockhart were lifelong bureaucrats and one of them gave away all their wards future earnings into perpetuity and seemed easily manipulated by the political players of their time.
I think they PISSED OFF A TREMENDOUS AMOUNT OF POWER PLAYERS ON THE HILL BACK THEN AND EVEN TODAY MANY DESPISE THE GSES. Bush one wanted to charge them access to the implied gubmint guarantee. They were mostly a Democrat leaning enterprise back in the days I was there. Jim Johnson created a lending program that targeted politicians home districts so the politicians could show up at ribbon cutting ceremonies, don't get me started with their non profit foundation giving...
They seemed almost too big for their britches, adversaries created FM Watch and nipped at the twins whenever they could.
They must have done something to really piss off Senator Mark Warner, HE STILL HATES THEM TODAY!
2.3 centuries, well look at the bright side ONLY 219 YEARS UNTIL WE GET OUR PROPERTY BACK FROM THE TEMPORARY CONSERVATORSHIPS!
HeeHee! I don't think anyone knows for sure how this twisted governmental 'conservatorship' is going to play out! I don't think there has ever been a more convoluted scenario then what has taken place with the gses over the last 13+ years!
Lately though it seems that the major decision makers are realizing that Private 1st Loss Capital Reserves makes sense when the federal government is backing $7T of MBS...
Where's the love for our jps friends? https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
California just allowed single family home lots to be zoned for duplexes, STATE WIDE! From todays WSJ: "California Gov. Gavin Newsom has signed legislation allowing the construction of duplexes on most properties with one home, a severe curtailing of single-family zoning in a state struggling with some of the nation's highest housing prices.
The legislation, a long-sought goal for proponents of more housing construction, also makes it easier to divide existing lots into two, potentially providing the opportunity for four homes to be built where one was previously allowed.
The median home price in California rose 144% between 2000 and 2019 to $591,866, according to the California Association of Realtors. Factoring in housing costs, California has the highest poverty rate of any state, according to the Census Bureau.
Researchers and advocates have said inadequate construction of new housing is a key reason for high prices and a driver of homelessness in cities like Los Angeles and San Francisco. Mr. Newsom, a Democrat, set a goal in 2019 of building half a million new housing units a year for seven years to erase the estimated 3.5 million homes the state would need by 2025.
Over the past five years, the state has averaged 109,000 homes a year, and during the pandemic in 2020, that dropped to 100,550, according to the Construction Industry Research Board, which tracks building-permit data.
"For too many Californians, the idea of owning a home, renting a house big enough for their family, or even just being able to live in the community where they work is a far-off dream," said state Sen. Toni Atkins, a San Diego Democrat who wrote the legislation. "This law will help close the gap and make those dreams a reality."
The law has provisions to prevent the displacement of renters and protect homes in historic districts and fire-prone areas.
Local elected leaders from cities across California opposed the legislation, saying it took away too much local zoning control. Leaders of more than 260 cities signed a League of California Cities letter this week urging Mr. Newsom to veto the bill because "it does not guarantee the construction of affordable housing nor will it spur additional housing development in a manner that supports local flexibility, decision-making, and community input."
Affordable-housing advocates also criticized the legislation for not containing provisions that mandate any new homes that are built be affordable."
The twins use to be the gold standard at this, Jim Johnson, who was CEO when I left Fannie Mae in 1993, was a powerful mover and shaker on the hill. David Maxwell was pretty good at it as well.
I remember what David Maxwell told me at the annual holiday party one year, "Our biggest risk is political risk".
That was true then and continues to this day.
David Stevens and the MBA, the NAR, and NAHB knows this as well and has effectively neutered the twins since 08....
https://www.investopedia.com/terms/r/regulatory-capture.asp
"Regulated industries devote large budgets to influencing regulators at federal, state, and local levels. By contrast, individual citizens spend only limited resources to advocate for their own rights. This is an extension of the concept of concentrated benefits and dispersed costs of regulation, public policy, and collective action in general, described by economist Mancur Olsen."
Hey just because our federal government stole all our Corporate profits since August 17, 2012 and unnecessarily put them under government control in September 2008 with a loan they could NEVER PAY BACK, is no reason to be bitter!
Remember the pledge, how it ends, "... with Liberty and Justice for all!" (Except evil banksters and hedge fund guys).
https://www.housingwire.com/articles/whats-behind-the-sharp-decline-in-mortgage-delinquencies/
"As shown in Exhibit 1, the delinquency rate tends to be highly correlated with the unemployment rate over time. This was certainly true over the past year, as unemployment spiked during the onset of the pandemic, then has fallen rapidly as the economy has re-opened and rebounded."
You shareholders need to "pay your fair share" AND CURRENTLY THAT'S 100% OF YOUR PROFITS UNTIL WE GET AROUND TO DECIDING HOW TO REFORM THE HOUSING FINANCE SYSTEM IN AMERIKA!
After the SCOTUS botched the Collins decision SO BADLY, is this really surprising? https://thehill.com/regulation/court-battles/572471-supreme-court-job-approval-sinks-to-all-time-low-poll-shows?amp
Hasn't the current administration done a 180 degree turn on everything the predecessor administration has done?
Why would the current UST and FHFA Director let the previous administration dictate what they need to do and when?
Practically speaking Cov has probably taken all the oxygen in the room since January 21st and that the current administration has a detailed legislative plan on what's next for the gses seems unrealistic, doesn't it?
I think we are all waiting for the plan from the current administration and it may take awhile but IT NEEDS TO GET THEM OUT OF THIS PERPETUAL CONSERVATORSHIP....
They could likely replace the Acting Director with someone else. But to date the vast majority of the current administrations picks for power in government positions have been to choose diversity.
It is interesting because on the one hand she has been a total tool of the financial establishment but on the other hand she has like 20 years experience with risk management via the FDIC.
Michael Calhoun seems more likely to monetize whatever the FHFA can shake out out of the gses and plow it directly into low income housing.
Right now I think the current administration is figuring out what they want to do....
"Multifamily-property values have increased 13% since before the pandemic, according to real-estate securities advisory Green Street. More money is being invested now in apartment buildings than in any other type of commercial real estate, according to data company Real Capital Analytics." Todays WSJ
Like many many federal agency regulators (e.g., FAA and Boeing), INDUSTRY CAPTURE IS AN ON GOING PROBLEM, HERE, Edward DeMarco IS LIKELY EMPLOYED BY A GROUP THAT HAS PROFITED FROM THE CRT PROGRAM THAT HAS DRAINED $15B OF NEEDED CAPITAL FROM THE GSES SINCE ITS INCEPTION. ...
The MBA, NAR, AND NAHB SO FAR HAVE BEEN GETTING EVERYTHING THEY WANT FROM SANDRA IN A VERY SHORT TIME PERIOD...
It will be interesting to see what the current administrations overall plan is, we know that affordable housing and inequality are important to them, will they free the twins and try to monetize whatever they can ASAP for these goals? Will the courts end this farce of a 'conservatorship' before the current administration can cash out? Will they be patient and slow and steady and rebuild capital organically? Will the financial establishment realize that a never ending 'conservatorship' is antithetical to their interests and push for a quick release?
Inquiring minds want to know...
""We want to make sure that we got that right,” she said. “Every time I talk to investors it's really something that they bring up, [and] also market participants.""
Sandra, THAT'S BECAUSE BUT FOR THE CRT PROGRAM THE GSES WOULD HAVE $15B MORE CAPITAL ON THEIR BOOKS (assuming that you won't steal their capital again).
That was a Sandra L Thompson quote from today, but I think she means that she's not going to let capital requirements get in the way of supplying the market with affordable housing financing, I guess...
Even the biggest jps issue surpassed 6% of par, go jps go! I think any positive investor (although probably mostly day traders) interest in the gses is good! GLTA!
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
"These amendments are intended
to facilitate an environment where leverage is not the binding
capital constraint for the Enterprises and where the Enterprises
have incentives to distribute acquired credit risk to private
investors through CRT rather than to buy and hold that risk."
Look at jps go!
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
Sandra L Thompson new nominated and confirmed Director of the FHFA?
These amendments are intended
to facilitate an environment where leverage is not the binding
capital constraint for the Enterprises and where the Enterprises
have incentives to distribute acquired credit risk to private
investorsthrough CRT rather than to buy and hold that risk.
The proposed rule includes three
areas of refinement to the current
capital rule:
• Replace the fixed prescribed
leverage buffer amount (PLBA) equal
to 1.5 percent of an Enterprise’s
adjusted total assets with a dynamic
PLBA equal to 50 percent of the
Enterprise’s stability capital buffer
• Replace the prudential floor of 10
percent on the risk weight assigned to
any retained CRT exposure with a
prudential floor of 5 percent on the
risk weight assigned to any retained
CRT exposure
• Remove the requirement that an
Enterprise must apply an overall
effectiveness adjustment to its
retained CRT exposures
The NPR also poses specific
questions for public comment on
these changes and proposes several
technical corrections to the final rule
published on December 17, 2020.
Nice find, thanks!
So what's up with the huge volatility between jps with similar characteristics?
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
Home
Newsroom
Press Releases
SEPTEMBER 14, 2021
BROWN STATEMENT ON BIDEN ADMIN’S PAUSE OF TRUMP-ERA RESTRICTIONS ON FANNIE MAE, FREDDIE MAC
WASHINGTON, D.C. – Today, Sen. Sherrod Brown (D-OH) – Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – issued the following statement after the Federal Housing Finance Agency (FHFA) and the Department of Treasury’s release of letter agreements to suspend and review restrictions on Fannie Mae and Freddie Mac’s (the GSEs) business activities. The Trump Administration announced the restrictions in January 2021.
“In January, the Trump Administration rushed through haphazard changes impacting homeowners, renters, and the entire housing system,” Brown said. “I applaud Acting Director Thompson and Secretary Yellen’s decision to pause and review these changes so we do not unintentionally restrict access to safe, affordable housing for homeowners and renters.”
When the Trump Administration’s changes were announced, Senator Brown raised concerns that these significant changes rushed through with little input could have unintended consequences for homeowners, renters, and the entire housing system.
"These suspensions do not affect the Enterprises’ ability to build or retain capital."