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I just see them and post them. Don't know his schedule. Pretty informed guy.
Shareholders: "Hey you can't do that"
Govt: "Just try to stop us"
Shareholders: "Hey give that back"
Govt.: " Make us"
Shareholders " That's illegal"
Govt. " So sue us LOL"
Shareholders " OK"
Sweeny: "Priveleged my ass. Give them back their companies you arrogant Michael Corleone wannabes.
Then I woke up.
Everything I have heard or read from him tells me he is long.
David Simms today you tube link
Meet Wall Street Refugees Running Bonds at Freddie Mac by admin on Tuesday, February 24th, 2015
(Bloomberg) — Way up in a Manhattan skyscraper, a band of
Wall Street refugees is quietly staking billions of dollars on
the American mortgage machine.
Their pedigrees are A-list: Citigroup Inc., Bank of America
Corp., Credit Suisse Group AG. Their job is to prowl for an edge
in the $6 trillion market for home-loan securities, a place
where, just seven years ago, greed and hubris collided in the
worst financial crisis since the Great Depression.
It might sound like some high-flying hedge fund, but it’s
not.
It’s Freddie Mac, the taxpayer-backed mortgage giant that
collapsed in 2008, along with its larger cousin, Fannie Mae.
Today, after multibillion-dollar bailouts, both effectively are
still wards of the state.
Which is why what’s happening inside Freddie Mac might come
as a surprise. With little fanfare, the company has recruited
traders from major banks and empowered some to place new wagers.
Chief Executive Officer Don Layton says the goals include
greasing the mortgage market, where Freddie Mac and Fannie Mae
still play pivotal roles. But the activity also presents
something else: an opportunity to boost profits.
No one is saying Freddie Mac is taking the kind of risks it
took during the subprime era. But given the fiasco of 2008, when
the two government-sponsored enterprises were placed under
federal conservatorships, some outsiders are concerned the
company may be unnecessarily gambling with taxpayer money.
Bearing Risk
“If things work out like they’re supposed to, the money
goes to the taxpayers, as well as the people who are getting
paid the salaries and bonuses,” said Jay Brinkmann, formerly
the chief economist of the Mortgage Bankers Association.
But if the new traders make a mistake or markets move in
surprising ways, “ultimately, that risk is held by the
taxpayers,” said Brinkmann, now a financial-services
consultant.
Even as Freddie Mac and Fannie Mae are pushed to expand in
their main business of insuring mortgage bonds to support the
housing market, they’re supposed to be unwinding their
investment books to reduce the danger of a future blowup. At
Freddie Mac, the new hires are indeed helping the company do
that, including in ways that Fannie Mae hasn’t.
But company disclosures, bond-offering documents and other
data show Freddie Mac is also taking new risks.
‘Smart Guys’
In December, for instance, its holdings of mortgage
securities and loans jumped by $6.4 billion to $408 billion.
They similarly rose during three other months over the past two
years. At Fannie Mae, holdings consistently dropped each month.
Layton, 64, likes to emphasize how his new traders are
focused largely on unwinding old bets. But he says his team is
also trading and holding onto slices of assets it’s meant to be
shrinking.
The former JPMorgan Chase Co. vice chairman who became
Freddie Mac’s CEO in 2012 says his company needs “smart guys”
to do things like stepping into the market for its bonds from
time to time to ensure it stays liquid.
“You need to make sure that the core mortgage securities,
your issues, are traded well,” Layton said via e-mail. “Over
time, our securities will trade at lower rates because we’re
providing a bid at times. All of this is good for the market,
good for the borrowers and good for the lenders.”
Returning Profits
It may be working. Last year, the discount at which some
Freddie Mac mortgage bonds trade to similar Fannie Mae notes
shrunk to an average of about 0.2 cent on the dollar from 0.3
cent in 2012, according to data compiled by Bloomberg.
The companies have given the government little reason to
complain, each returning about $20 billion more than they got in
their bailouts.
Their overseer, the Federal Housing Finance Agency, said in
a statement that it’s fine for Freddie Mac to be occasionally
buying bonds to ensure a liquid market. It also notes the
company had to cope with a brain drain in its capital markets
division after the crisis, something Fannie Mae didn’t face to
the same degree.
So who are Layton’s smart guys? Since July 2013, Freddie
Mac’s investment and capital markets division has been led by
Michael Hutchins, who ran global fixed income at UBS Group AG
before helping to start an internal UBS hedge fund.
That fund, Dillon Read, collapsed in 2007, when its bets on
subprime securities went wrong. The fund’s holdings led to
billions of dollars in writedowns for the Swiss bank following
Hutchins’ departure that year, after which others at the bank
managed the trades.
Market Pioneer
Then there is Vadim Khazatsky, who helped pioneer the
mortgage securities market at Salomon Brothers during the 1980s,
lending his name to a still popular type of bond known as very
accurately defined maturity tranches, or VADMs. He spent more
than 20 years at Salomon and Citigroup, which later subsumed it.
Another senior hire, Lee Godfrey, started his career in
mortgage bonds at Salomon in 1993. He later headed a team at
Bank of America and then oversaw various mortgage and
structured-finance businesses at Credit Suisse.
Others include Kevin Cheng, who departed Citigroup in June;
John Wang, also formerly of Citigroup; Eliot Deutsch, who worked
for Citigroup and BNP Paribas SA; and Craig Grabowski, who left
Bank of America’s Merrill Lynch unit in June.
Manhattan Digs
Some team members are based in Freddie Mac’s headquarters
in McLean, Virginia, while others work out of offices in the
MetLife Building in Midtown Manhattan. Freddie Mac declined to
disclose the employees’ compensation. In 2011, the median cash
pay for senior vice presidents at Fannie Mae and Freddie Mac was
$723,500, according to a report by the FHFA’s inspector general.
The median for vice presidents was $388,000.
While a variety of factors affect the size of the
companies’ portfolios, Freddie Mac’s trading of mortgage bonds
also helps explain why holdings of its own securities grew by
$6.4 billion in August. Still, its investment portfolio was more
than $60 billion below a $470 billion cap for the end of 2014, a
limit tied to mandates for Fannie Mae and Freddie Mac to reduce
their holdings by at least 15 percent annually to $250 billion.
Former Federal Reserve Chairman Alan Greenspan said in an
e-mail that it wouldn’t be a good idea to allow the firm to be
“producing income by borrowing at Freddie Mac’s subsidized
rate” — echoing his criticism of the two government-sponsored
enterprises before the subprime crisis.
‘Runs Counter’
“They need to be unwinding the portfolios as soon as they
can,” Clifford Rossi, an executive-in-residence at the
University of Maryland’s Robert H. Smith School of Business
who’s worked at both, said in December. “To get an organization
staffed up for the purposes of ongoing trading activity runs
counter to the intent. I have a real problem with that.”
Layton said Freddie Mac isn’t buying anything that’s
illiquid and not making large bets on interest rates. With its
“legacy” assets, he wants to mitigate dangers for taxpayers
without selling assets on the cheap. And the riskiest
investments have in fact rebounded in value since the crisis,
helping Fannie Mae and Freddie Mac to start to shed more after
contributing to the U.S. turning profits on their bailouts.
“We think it has gone very well indeed,” Layton said.
His company has been using a bit of financial slicing and
dicing as part of the effort. Homeowners who fell behind on
their mortgages but have now caught up are having their loans
bundled into new Freddie-guaranteed securities. Freddie is then
packaging those bonds into collateralized mortgage obligations
with various levels of risk and cherry picking parts it wants.
Outflanking Banks
The firm, in retaining select pieces of those CMOs and
others with potentially concentrated risks, is outflanking Wall
Street banks that might have otherwise gotten potentially
lucrative investments to sell.
“If they choose to do it in a manner that’s slightly more
profitable to them, that doesn’t run afoul of what they’ve been
told to do,” said Laurie Goodman, director of the Urban
Institute’s Housing Finance Policy Center. “They’re only
helping their bottom lines.”
Given their spectacular collapses, Fannie Mae and Freddie
have plenty of doubters. To Josh Rosner, an analyst at research
firm Graham Fisher Co., Freddie Mac’s trading strategy
underscores the dangers of leaving these companies in limbo
without any capital buffers.
“The bigger issue it highlights is that if something goes
wrong, the Treasury is on the hook,” he said.
http://originatortimes.com/freddie-mac/meet-wall-street-refugees-running-bonds-at-freddie-mac-2/
Is Freddie Mac Rebuilding Its Investment Portfolio?
Posted By: Michael IdePosted date: February 24, 2015 11:33:52 AMIn: BusinessNo Comments
A 19% annualized jump in Freddie Mac’s mortgage-related investment portfolio has raised red flags, but the general trend is still going in the right direction
Both Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac are gradually reducing their mortgage-related investment portfolios, so when Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) suddenly increased its portfolio by an annualized 19% last December it caught some people’s attention. So when Bloomberg’s Jody Shenn says that it sounds like a ‘high-flying hedge fund’ run by ‘Wall Street refugees,’ it sounds like a return to lax controls and risky deals from before the financial crisis. However, focusing on the long term trend instead of just one recent month tells a very different story.
For context, at the end of 2008 Freddie Mac’s mortgage-related investment portfolio had a balance of $805 billion. That balance fell by 6.1% in 2009 to $755 billion, and then by 7.7%, 6.3%, 14.7% and 17.3% in the years that followed bringing the portfolio down to $461 billion in 2013. During this time there have been months here and there when the net change was positive as Freddie Mac traded around its position, but the overall trend has been to steadily unwind the mortgage-related portfolio. In 2014 that trend continued with an 11.4% full-year drop ending at $408 billion, even after you take the December purchases into account, hardly an about-face.
Since former head of global fixed income at UBS AG (NYSE:UBS) Group Michael Hutchins took over Freddie Mac’s investments and capital markets division in July 2013 the portfolio has dropped from $521 billion to $408 billion. Again, while there have been some months where the portfolio either didn’t budge or even grew a bit, it’s clear that he’s in the process of drawing down the investments.
Shenn says that the portfolio balance ‘similarly rose during three other months over the past two years,’ but the actual annualized increases he’s talking about were 6.3%, 0.6%, and 0.1%. None of the other three hit double digits like last December, and only one was really substantive.
December looks like an outlier
“You need to make sure that the core mortgage securities, your issues, are traded well,” Layton told Shenn in an email. “Over time, our securities will trade at lower rates because we’re providing a bid at times. All of this is good for the market, good for the borrowers and good for the lenders.”
After all the missteps and mismanagement that we’ve seen from Fannie Mae and Freddie Mac, especially in the years immediately before the subprime bubble collapsed, you can understand why people are skeptical (that’s to say nothing of the GSE’s political opponents). But December looks like an outlier from an agency that’s gradually reducing the size of its investment portfolio as intended.
http://www.valuewalk.com/2015/02/is-freddie-mac-rebuilding-its-investment-portfolio/
It is ironic that we are depending on the government to save us from the government. That is why share price is so low. Not a lot of belief out there. Although some have been holding through all of this organized crime it has allowed others like myself to purchase at an enormous discount with the belief that the rule of law will prevail. The share price reflects that ours is not a popular opinion.
from yesterday, lots of good quotes. Fannie Mae And Freddie Mac Earnings Analysis Feb. 21, 2015 7:26 AM ET | 5 comments | About: Freddie Mac (FMCC), FNMA
Disclosure: The author is long FNMA, FMCC. (More...)
Summary
•The political tide is turning in favor of Fannie Mae and Freddie Mac shareholders.
•Activist Investors see normalized valuations over $20.
•Judge Sweeney has been ruling in favor of the plaintiffs.
Fannie Mae Earnings Highlights
• Fannie Mae (OTCQB:FNMA) reported annual net income for 2014 of $14.2 billion and comprehensive income of $14.7 billion. Fannie Mae reported net income of $1.3 billion and comprehensive income of $1.3 billion for the fourth quarter of 2014.
• Fannie Mae paid a total of $20.6 billion in dividends to the Treasury in 2014. The company expects to pay the Treasury $1.9 billion in dividends in March 2015. With the expected March 2015 dividend payment, the company will have paid a total of $136.4 billion in dividends to the Treasury. Dividend payments do not reduce prior Treasury draws, which total $116.1 billion since 2008.
• Fannie Mae provided approximately $434 billion in liquidity to the mortgage market in 2014, including approximately $128 billion in liquidity in the fourth quarter of 2014, enabling families to buy, refinance, or rent homes.
• Fannie Mae helped distressed families retain their homes or avoid foreclosure through approximately 165,000 workout solutions in 2014, including approximately 34,000 loan workouts during the fourth quarter of 2014.
(click to enlarge)
Freddie Mac Earnings Highlights
• On Feb. 19, 2015, CEO Donald H. Layton said, "Today, Freddie Mac announced another year of solid financial performance, reporting net income of $7.7 billion and comprehensive income of $9.4 billion for 2014."
• Freddie Mac (OTCQB: OTCQB:FMCC) reported net income of $7.7 billion for the full-year 2014, compared to $48.7 billion for the full-year 2013. The company also reported comprehensive income of $9.4 billion for the full-year 2014, compared to $51.6 billion for the full-year 2013.
(click to enlarge)
The community of Third Amendment Skeptics is growing
Seeking Alpha's very own David Sims says
“
Recent analyst reports have indicated that the value of Fannie Mae and Freddie Mac common stock shares could rise above $7 if the net worth sweep of these companies were to end.
Fannie Mae posted its 12th consecutive quarterly profit and will pay the U.S. Treasury another $1.9 billion in dividends as part of its government rescue. Jeff at the Washington Business Journal has this to say:
“
Fannie Mae, which is required to return all profits to the Treasury as dividend payments on its bailout loan, paid a total of $20.6 billion in dividends to the Treasury in 2014. With its latest payment, due in March, it will have paid $136.4 billion in dividends to taxpayers, more than the $116.1 billion it received in its 2008 bailout.
Dividend payments do not reduce the government's stake in Fannie Mae it holds in exchange for its rescue.
This raises the alarming question, if you lend a private business money and they pay you back, are you allowed to take over the entire business? If instead, the government loans a private business the money during a time of crisis and is paid back, does the government own the profits of the private business in perpetuity?
The Economist puts this best in an article titled Never been better:
•Who benefits most from this is a subject of controversy.
The Wall Street Journal sees a future
Joe Light at the Wall Street Journal noted that the CEO of Fannie Mae sees a bright future for potential changes in the terms of the agreement (with the Treasury) as well as quoted Wade Henderson, president of the largest Civil and Human Rights organization in America, regarding the lack of political will for reform.
“
Fannie's net interest income, which includes fees from backing mortgages, was $5.1 billion in the fourth quarter, compared with $4.9 billion in the same period of 2013.
...
Because of the decreasing capital cushion, "the possibility of our needing to take a draw from Treasury increases over time," said Fannie Mae CEO Timothy J. Mayopoulos on a call with reporters on Friday, saying that any potential change in the terms of the agreement would be up to policy makers.
...
"People say in a self-righteous way, 'Oh, Congress must act. Congress must come together and determine whether Fannie and Freddie should survive.' The truth is, that will never happen," said Wade Henderson, president of the Leadership Conference on Civil and Human Rights, a coalition of groups that over the past few months has sent the FHFA letters calling for the recapitalization of the companies.
The Senate Banking Committee is pushing for release
According to Gator Capital's H2 2014 investor letter, it is becoming increasingly likely that Fannie and Freddie will be around for some time to come.
“
With the companies having paid more cash back to the Treasury than they borrowed, we believe there is an ongoing political shift that is favorable for the companies. We saw signs of this political shift during a Senate Banking Committee meeting in mid-November where then Senate Banking Committee Chairman Tim Johnson (D-SD) asked FHFA Director Watt to release the companies from Conservatorship. New Senate Banking Committee Chairman Richard Shelby (R-AL) said in a recent interview that we should get Fannie and Freddie "up and running on their own" as soon as possible. We think this is a material change in Sen. Shelby's thinking on the GSEs as he opened the door to the continued existence of the companies.
This sentiment is echoed by CEO Tim Mayopoulous:
“
Although many elected to Congress believe it is best to reduce the role of the federal government in housing finance, Mayopoulos said nearly every country in the world plays a public role in housing because of the "fundamental societal need."
Looking back, Fannie Mae, which was placed in conservatorship in 2009 during the financial crisis, ended up providing stability in the U.S. housing market, he said.
Valuation Analysis
Bruce Berkowitz thinks that combined Fannie and Freddie will earn $21 billion. William Ackman estimates earnings at $17 billion. Millstein estimates $18 billion a year. Raferty Capital Markets LLC's VP of equity research, Richard X. Bove, sees Fannie as ultimately a $20+ stock. Let's see how we get there. Right now, combined they have 1.81 billion shares outstanding and it costs $2 billion per year to service the junior preferreds. If you average the three estimates and subtract out the preferred service expense, you get $16.6 billion per year of earnings that may flow through to common if all of their profits stop being taken by the Treasury. On a per share basis, that is $10.31/share of normalized earnings. At a 10x multiple that is $103.10.
If, on the other hand, the government is allowed to exercise its warrants even after they've been paid back more than they lent, then they would own ~80% of Fannie and Freddie. The question here is, should we assume that on a forward basis that any company that goes into a government run conservatorship in the United States immediately is to be diluted 80%? To me that looks like a fifth amendment takings, but people tell me otherwise so I'll provide a diluted calculation for your benefit. Normalized EPS would be $2.06/share and at 10x, the stocks of Fannie and Freddie would trade at $20.60. This valuation is significantly higher than the current price. This is in line with Ackman's expectations:
“
"we think we can make 25x our money in Fannie and Freddie"
If you assume that this is a binary situation where the outcomes are $0 or $20.60 and the current price is $2.91, that reflects the market's attitude is that the probability of success is 14%, while the probability that shareholders get nothing is a whopping 86%.
What about the warrants and why do I think it's actually better? When you pay off your mortgage how much of your house does the bank own? 100%, 80% or 0%? The answer right now is not 0% if your home is Fannie Mae. Right now, 100% is the answer. Proposed resolutions like Ackman suggest that only 20% is the answer for what is rightfully mine, suggesting that all future conservatorships should expect to come out worse than a receivership or Chapter 7 Bankruptcy.
Judge Sweeney Rules The Court of Claims
A 14% chance for success may not sound like much, and to me it absolutely does not, especially when it sounds like the plaintiffs are winning in Sweeney's Court of Claims. Take a look below as she shuts down Mr. Schwind, of the defense:
“
THE COURT: I'll also let you know, although the decision or the order hasn't [been] issued yet, the stay will not be granted. So, you - there wouldn't have been a legitimate basis for you to - and I'm not saying you did - to delay discovery. You've moved forward with it, but the stay request will be denied.
...
THE COURT: I understand your position. If I were in your shoes, I'd make the same motion, but it will not be granted. So, I'm just letting you know that. Thank you.
Previously Judge Sweeney has suggested that the Treasury and FHFA have been joined at the hip, so when you're making an investment decision regarding whether to own Fannie and Freddie at any given price, what is the probability that you think Judge Sweeney will rule in favor of the Plaintiffs and by when? My sources think that for political reasons, as discovery heats up, release is to happen some time in the next two years. The idea being that the third amendment, net worth sweep, was designed to buy time for reform, a.k.a. to build out the CSS and the CSP. My sources also say that Melvin L. Watt is a good guy, and I agree that relative to Demarco, he certainly is doing a lot better. In the future, it will be interesting to see where G-Fees go.
Note that if Fannie Mae and Freddie Mac are to remain in this state of perpetual profit payments to the Treasury, G-fees ought to go lower because otherwise they are a tax on Americans who cannot own their homes without a mortgage. Then again, since a recapitalization and release might be around the corner, it might make sense to raise G-Fees. Melvin L. Watt knows and time will tell.
http://seekingalpha.com/article/2937536-fannie-mae-and-freddie-mac-earnings-analysis
from value walk comment section on same article
Every functioning Western Democracy has some government back stop in there housing market. In a pollyanish
world we would have a housing market where private capital guarantees all. No taxpayer guarantee, no government involvement to help low income families obtain access to home ownership. Unfortunately- there is not enough private capital to service the home mortgage market and no private institution willing to hold paper for thirty years. The shut them down theory will not happen and in the event that an alternate universe will come into play, we will all be looking at much higher interest rates. Amortize that over thirty years- that will be the largest tax increase in US history.
Fannie is bipolar
reading the articles out this morning confuses me. If freddie made 227 mil. how are they going to pay 900 mil. next month to treasury? Are they still holding from previous quarter? I think that I read these numbers in 2 different articles.
WASHINGTON — Mortgage giant Freddie Mac posted net income of $227 million for the fourth quarter, down sharply from the same period of 2013, as it sustained losses on the investments it uses to hedge against swings in interest rates.
Nonetheless, the October-through-December results reported Thursday marked the government-controlled company's 13th straight profitable quarter.
McLean, Virginia-based Freddie also said it will pay a dividend of $900 million to the U.S. Treasury next month. Freddie will have paid $91.8 billion in dividends, exceeding its government bailout of $71.3 billion.
Read more here: http://www.sanluisobispo.com/2015/02/19/3497317/freddie-mac-posts-227m-profit.html#storylink=cpy
Fannie Mae to Repay Taxpayer Bailout Next MonthThursday, 19 Feb 2015 09:39 AM US mortgage-finance giant Fannie Mae said Friday it plans to pay the US Treasury $7.2 billion in dividends in March, reimbursing in full its 2008 taxpayer-funded bailout.
Fannie Mae reported net income of $6.5 billion in the fourth quarter, its eighth consecutive quarterly profit, and a whopping net profit of $84.0 billion for all of 2013, nearly four times the previous year.
With the March dividend payment, Fannie Mae will have paid $121.1 billion in dividends, eclipsing the $116.1 billion in funding it has drawn since 2008.
The company benefited from a large number of settlements related to the subprime mortgage crisis, including an $11.6 billion payment from Bank of America over soured loans it sold to Fannie.
Special: Handpicked IRS Attorney Reveals How to Audit-Proof Your Income
The company said it expects to remain profitable in the foreseeable future, though income levels are expected to be "substantially lower" than in 2013.
Both Fannie Mae and Freddie Mac, which back most of the mortgages financed in the United States, have been operating under the conservatorship of the Federal Housing Finance Agency since September 2008.
Latest News Update
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The government stepped in to rescue them from bankruptcy during the financial crisis. The bailout was aimed at providing liquidity and stability to the reeling housing market and halt contagion in the financial sector.
Fannie Mae said that from 2009 through 2013, it provided $4.1 trillion in liquidity to the mortgage markets, supporting 12.3 million mortgage refinancings and 3.7 million home purchases.
Special: Does Obama Belong to This Secret Society? (Shocking)
Freddie Mac has not yet reported fourth-quarter financial results. Freddie Mac was to pay a $30.4 billion dividend to the Treasury in December, making whole its debt to taxpayers with a total reimbursement of $71.3 billion.
Founded by Congress, the two companies will remain under conservatorship until Congress acts to wind them down or remove government support.
Read Latest Breaking News from Newsmax.com http://www.Moneynews.com/Personal-Finance/Fannie-Mae-taxpayer-bailout-mortgage/2015/02/19/id/625678/#ixzz3SGSnA6uJ
Urgent: Rate Obama on His Job Performance. Vote Here Now!
http://www.moneynews.com/Personal-Finance/Fannie-Mae-taxpayer-bailout-mortgage/2015/02/19/id/625678/
never mind
don't know if it is FnF or AIG related or not.
fox business news Treas. Sec Lew possible claw back. coming up.
U.S. identifying individuals to prosecute for role in mortgage crisis
By REUTERS
PUBLISHED: 14:40 EST, 17 February 2015 | UPDATED: 14:40 EST, 17 February 2015
By Julia Edwards
WASHINGTON, Feb 17 (Reuters) - U.S. Attorney General Eric Holder said on Tuesday that he has given U.S. Attorneys a 90-day deadline to evaluate whether they can bring cases against any individuals for their role in the 2008 financial crisis.
Federal prosecutors who previously brought charges against institutions for inappropriately marketing residential mortgage-backed securities will investigate individual employees for potential criminal or civil charges, Holder said in a public appearance at the National Press Club on Tuesday.
Holder said he asked the prosecutors to report back to him in 90 days "over whether they think they are going to successfully bring criminal or civil cases against those individuals."
Because Holder is expected to leave office soon, he said that the decision to prosecute would ultimately be up to Loretta Lynch, the administration's nominee to replace him if and when she is confirmed by the U.S. Senate. (Reporting By Julia Edwards; Editing by Sandra Maler)
Share or comment on this article
http://www.dailymail.co.uk/wires/reuters/article-2957575/U-S-identifying-individuals-prosecute-role-mortgage-crisis.html
Low mortgage down payments make a comeback POSTED 1:33 PM, FEBRUARY 17, 201,
By Mark Fahey
NEW YORK (CNNMoney) — Borrowers who have steady income and good credit, but not much money in the bank, will find that it recently became easier to buy a home.
Down payment requirements, which rose after the sub-prime mortgage crisis, are easing again as lenders and mortgage backers try to draw in new buyers.
“It’s one of the things that’s inhibiting first-time home buyers,” said Rob Chrane, president of Down Payment Resource. “There are a lot more people who can qualify for a home that don’t realize that they can.”
FHA cuts insurance costs
The Federal Housing Administration has long backed loans for borrowers with lower credit scores and with down payments as low as 3.5%, but until this year it also required hefty insurance payments.
FHA annual insurance premiums dropped dramatically at the beginning of 2015. The change, from 1.35% to only 0.85%, will make FHA loans a better choice for some borrowers after years of prohibitively high premiums, said Anthony Hsieh, chief executive officer of LoanDepot, one of the largest FHA lenders in the country.
“We’re starting to get back to what’s reasonable,” said Hsieh. “The crisis has shaken the market so much that there is no doubt there was an overreaction.”
Fannie and Freddie
Fannie Mae and Freddie Mac guarantee more than half the country’s mortgages. At the end of 2014, the two government-backed companies announced plans to slash minimum down payments from 5% to 3%.
The new program from Fannie Mae went into effect in December, and the one from Freddie Mac will begin in March. Both are for first-time homebuyers or those refinancing their mortgage, and the Freddie Mac program is restricted to low-income borrowers.
Loans backed by the two mortgage giants still require private mortgage insurance for down payments below 20%.
And just because Fannie and Freddie are willing to buy loans with looser requirements doesn’t mean the lenders themselves will change their standards.
“It’s a phenomenon of the post-recession where lenders learned their lesson,” said David Stevens, president of the Mortgage Bankers Association. “They learned that simply because the investor will allow it, the lender may still not feel comfortable doing it.”
“Rural” and VA loans
Other types of low-down payment loans have also become far more popular since the recession.
Despite its name, loans from the Department of Agriculture are available to borrowers in many locations that are hardly rural, and they include no-money-down financing. To be eligible for USDA loans, a borrower must have dependable income and decent credit, and can’t already own a home, exceed certain area median income thresholds or live within certain urban areas.
Department of Veteran Affairs loans are also booming, coming close to outnumbering FHA loans. Although not available to the average American homebuyer, VA mortgage backing allows veterans and surviving spouses to purchase property with no money down, no outside insurance and limited closing costs.
Average VA interest rates are lower, and credit and income requirements are also more flexible than conventional loans.
A return to easier credit
The shift toward loans with lower down payments has drawn criticism from some politicians — after all, easy loans with little money down contributed to the crisis that led to the Great Recession.
Stevens said that new rules for qualified mortgage loans and more diligent underwriting by lenders will protect the lending market.
“Down payment has become the single largest barrier to home ownership,” said Stevens. “Quite frankly, it’s going to be a lot safer and sounder this time than it was in the past.”
http://wqad.com/2015/02/17/low-mortgage-down-payments-make-a-comeback/
uh, I went to an appointment and a meeting. Did something else happen? Did I miss some news in the last hour?
opinion and question for the board. If the Fox News report yesterday [ meaning the publicity of the report and the content of the report]was enough to trigger this kind of buying well then there must have been a lot of buyers sitting on the sidelines waiting for anything positive. Therefore there must be more and more individuals being educated on the situation with FnF. That is my opinion. My question is....Am I smoking crack or are our attempts individually and collectively through groups like Investors Unite and through petitions actually turning some heads? Is the public waking up?
My opinion is that they print what they are paid to print. Spin doctors want the price to rise. great for us. Big money buying FnF. Big money tipping off key players. Big money buying news from the media.
Dividend Payments from Fannie Mae (FNMA) and Freddie Mac (FMCC) Expected to Top $225 Billion In addition to positive chatter on the litigation front after a weekend New York Times piece, today's upside in GSEs Freddie Mac (OTC: FMCC) and Fannie Mae (OTC: FNMA) could come as Freddie Mac has announced that it will release Q4 and full-year 2014 financial results before market open on February 19. Fannie Mae is expected to release its earnings in the days ahead as well.
Most expect another multi-billion dividend payment to the Treasury. Specifically, Compass Points' Isaac Boltansky notes with the expected Q4 payment, the Treasury Department would have received over $225 billion in cash payments on its $189 billion in GSE senior preferred stock.
Fannie Mae is up 10.6% mid-day, while Freddie Mac is up 11.2%
http://www.streetinsider.com/Analyst+Comments/Dividend+Payments+from+Fannie+Mae+(FNMA)+and+Freddie+Mac+(FMCC)+Expected+to+Top+$225+Billion/10277560.html
Navy
We all know you have the hots for her but please stop pestering her. LOL
"frankly, if a party calls and says I'm just the greatest thing since
sliced bread, it's rather offputting. I'm certainly not
going to in some way penalize the Plaintiff because
someone is calling me, trying to butter me up, but just
so they know, it doesn't work."
Stupid money managers and hedge fund owners don't know what they are doing. The stock price is going all crazy because of those amatures.
"Gamblers, are kidding themselves"
Millennials join the house hunt Hadley Malcolm 25 Mins Ago USA Today When the couple, both 26, met with a mortgage specialist in December 2013, they found out Biethan would need to improve his score in order for them to get pre-approved for a mortgage. In fact, neither of them knew their credit scores before meeting with the banker, but they were ready to buy their first home after living in Seattle for about six years.
"We found out, OK your credit score really affects your interest rate," Kapelke says. Biethan worked to improve his score over the past year, and the two revisited homeownership in the fall. They closed on a townhouse in West Seattle last month.
With rents rising into unaffordable territory, housing inventory up and mortgage rates hovering below 4%, 2015 may prove to be the year of homeownership for millions of Millennials. Real estate website Zillow predicts Millennials will overcome Gen X as the largest group of home buyers this year — more than half of 18- to 34-year-olds said they plan to buy a house in the next one to five years, according to a survey by Zillow last summer.
But after putting away enough savings, the biggest hurdle for Millennial buyers may be the learning curve that comes with understanding the process, as well as a host of new financial terms, trade-offs and commitments to consider.
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It's a stressful process, especially when you've never done it before, recent first-time Millennial buyers say. Kenny Coleman, 25, bought his first place — a loft-style apartment in Cincinnati — in December. He says the first bank he went to for a mortgage wasn't good at explaining the financing process to a first-timer. "They used all this jargon," he says. "And they're talking about all these different insurances." Coleman, who says the process took him from "complete idiot to pretty well versed" in a matter of weeks, ultimately went to a different bank that was willing to give him a fixed-rate mortgage instead of an adjustable-rate mortgage.
Read More Millennial entrepreneurs and student debt: It's complicated
Heading into the popular spring selling season, some real estate companies say they're already seeing interest spike from new buyers. Listings for townhouses and starter homes have seen more traffic in the past month on john greene Realtor's website, says Scott Parker, vice president and sales manager.
"There are Millennials on the sidelines that when we provide the right supply on the market are going to be very curious and interested in buying," he says.
If you're one of them, here's what housing experts and recent Millennial homeowners say first-time buyers absolutely need to know before getting into the housing market:
First, as Kapelke attests, find out what your credit score is. It's the main factor determining what rates you'll get on a mortgage or whether lenders will work with you in the first place.
Kapelke and Coleman both say they realized it was the right time to buy when they knew they'd be living in their respective cities for the foreseeable future. "Personally, are you going to be living in that area for at least the next five to seven years?" Kapelke says. "You kind of need to be settled, otherwise you're just going to lose money when you're selling (your house)."
You don't have to have the traditional 20% down payment to become a homeowner, says Tim Savoy, a real estate agent with Coldwell Banker in Washington, D.C. He says many of his clients aren't aware of programs, like a local one called DC Open Doors, that will cover much, and sometimes all, of a down payment.
And Svenja Gudell, senior director of economic research at Zillow, says more lenders now are willing to work with clients on a conventional loan if you have 10% down or even as low as 5%. FHA (Federal Housing Administration) loans allow you to pay as little as 3.5% down, but are often more expensive than conventional loans backed by Fannie Mae and Freddie Mac, Gudell says.
Read More Millennial wage gains: Too little, too late?
Fannie Mae and Freddie Mac announced in December that they would back mortgages with down payments as low as 3%. But Gudell says not many lenders will work with buyers putting that little down.
Plus, be aware of how much more it will cost you when you have a lower down payment. Anything less than 20% will require that you also pay a monthly mortgage insurance. FHA loans will lock you into private mortgage insurance for the duration of the loan. But if you take out a conventional loan with less than 20% down, you can stop paying mortgage insurance once you have 20% equity in your house, Gudell says. FHA loans also often have higher interest rates and require an up-front mortgage insurance payment in addition to the monthly payment.
Don't become fixated on the listing price of a home, says Parker, calling it one of the biggest pitfalls first-time buyers fall into. Buying a house means you're not only responsible for a monthly mortgage payment but other expenses, such as homeowners insurance and property taxes. Fees associated with closing a sale — such as the origination fee, appraisal fee and courier fee — can also equal another 2%-5% of your loan, Gudell says.
Rob Keiser, a financial aid officer and executive management trainee at his family's Keiser University system in Florida, says he didn't realize how expensive homeowner association fees could get, especially in Florida, where certain neighborhoods require homeowners to join nearby golf or country clubs.
"There were places that were cheap and then had over $1,000 in HOA fees (due quarterly)," says Keiser, 25, who bought his first house in May in Delray Beach. He also recommends reading HOA contracts and making sure your lifestyle will fit with rules on pets, curfews and visitors.
Shop around for mortgages and get at least three quotes, says Alison Paoli, a spokeswoman for Zillow. And pay attention to both the interest rate and APR, she says. The APR is the rate that will reflect the true cost of your loan including additional financing charges, such as property taxes and insurance.
http://www.cnbc.com/id/102430223#.
Fannie Mae (FNMA), Freddie Mac (FMCC) Gain as NY Times Outrage May Favor Plantiffs
StreetInsider.com? - 25 mins ago
Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC) are gaining today, which could be related to a New York ... To continue reading this article and more ...
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCwQqQIwAA&url=http%3A%2F%2Fwww.streetinsider.com%2FAnalyst%2BComments%2FFannie%2BMae%2B(FNMA)%2C%2BFreddie%2BMac%2B(FMCC)%2BGain%2Bas%2BNY%2BTimes%2BOutrage%2BMay%2BFavor%2BPlantiffs%2F10277021.html&ei=VF7jVI-6Dfi1sQTp5oGICA&usg=AFQjCNGBTINmJw8Kanrs855-ZVrFUDzFww
GSE bulls take control Feb 17 2015, 10:15 ET | By: Stephen Alpher, SA News Editor Contact this editor with comments or a news tip
A weekend piece in the NYT brings to light the extraordinary secrecy claims the government is making to prevent it from having to produce documents concerning the decision to expropriate all profits of Fannie Mae (OTCQB:FNMA +12%) and Freddie Mac (OTCQB:FMCC +13.6%) in late-summer 2012.At issue is exactly what the Obama administration - in the midst of an election battle and eyeing surprise profits at the GSEs - had in mind when it altered the bailout agreement and ordered the sweep.More fuel: Hank Greenberg's suit against the government over the AIG could be tilting in his favor. The "Greenberg Trade," says Charlie Gasparino, is a favorite of money managers betting that if Greenberg wins, it bodes well for those fighting the government over Frannie.The two stocks are higher by more than 30% over the past couple of sessions.
http://seekingalpha.com/news/2301906-gse-bulls-take-control
FNMA on Fox Business just now."stock is on fire" after Gasperino's report.
Is that true if fnma does not trade on a major exchange?
Thanks. A good review.
Can you send me the google link?
you must have been reading my mind
3% down payments lure first-time homebuyers
Rodney White, The Des Moines Register
John Eddleman, a first-time homebuyer, works on his house in Des Moines. Eddleman bought his house in January using a 3% down payment.
DES MOINES, Iowa — After years of moving around the country for his job with Marriott hotels, John Eddleman wanted to put down roots.
Last month, he bought a brick bungalow on Des Moines' south side, taking advantage of a recent federal policy change that allows down payments of as low as 3%.
"It came at just the right time because otherwise I would have had to scrape a lot more money together," Eddleman, 49, said. "At 3% down, you can't pass that up."
A collection of new policies — including lower down payment requirements, decreased mortgage insurance premiums and looser lending standards — are intended to make it easier for first-time buyers like Eddleman to get a loan.
USA TODAY
Average 30-year mortgage rate jumps to 3.69%
Some say the changes won't remove the underlying hurdles for first-time buyers, like slow wage growth and student loan debt. And some lawmakers have criticized the policies as a step toward the risky lending practices that led to the 2007 housing crash. But lenders and real estate officials say they expect the changes to bring a wave of new homebuyers in 2015.
"It's being predicted in Iowa and across the country: This is going to be a year when we see a lot of Millennials and first-time homebuyers get into the market," said Brennan Buckley, general manager of Iowa Realty.
EASING THE ROAD TO HOMEOWNERSHIP
Recent policy changes aim to improve access to home loans in several ways:
• In December, mortgage giants Fannie Mae and Freddie Mac announced they would reduce the minimum down payment on certain mortgages from 5% to 3%. For someone buying a $150,000 home, the change means the difference between a down payment of $7,500 and $4,500.
“This is going to be a year when we see a lot of Millennials and first-time homebuyers get into the market.”
Brennan Buckley, general manager of Iowa Realty
• In January, the Federal Housing Administration announced it was reducing mortgage insurance premiums by 50 basis points. The White House said the reduction would save the average homebuyer about $900 a year and would enable about 250,000 people to buy a home.
• Lenders have been lowering some of the requirements on borrowers in response to federal regulators clarifying mortgage lending rules created in the wake of the 2007 housing crash.
Brad Blackwell, executive vice president with Wells Fargo Home Mortgage, said he expects first-time home sales to grow less than 10% in 2015, but he said it would still be a "meaningful" increase.
Wells Fargo, the largest mortgage lender in the country, is offering two types of 3%-down mortgages. It's still a bit early to gauge demand, "but we've seen a lot of excitement about them," Blackwell said.
In the past year, Wells Fargo has rolled back several borrower requirements. The company increased the amount of "gift money," like cash from a homebuyer's parents, that a borrower can use toward a down payment on some loans. It also reduced the minimum credit scores for certain loans.
To qualify for a 3%-down mortgage from Wells Fargo, borrowers need a credit score of at least 620. But without a good job and a solid explanation for credit blemishes, buyers will probably need a score of 660 to 680, Blackwell said. The minimum score for FHA mortgages is 600.
MILLENNIALS ENTER THE MARKETPLACE
Easier access to credit will be one factor in getting first-time homebuyers into the market. A bigger factor may be that Millennials are finally starting to settle down, Blackwell said.
Rodney White, The Des Moines Register
John Eddleman's house in Des Moines, which he bought in January using a 3% percent down payment.
"We're starting to see them become homebuyers," he said. "Forget the financial end. The pure demographics are going increase the number of first-time homebuyers in the market."
Frank Nothaft, chief economist at the real estate research firm Corelogic and the former chief economist for Freddie Mac, said lower down payments and mortgage insurance premiums come at the right time. Interest rates remain low, and the spring buying season is around the corner. But they're not a cure-all.
"It doesn't mean everyone who is renting right now will suddenly qualify for a mortgage," he said. "There are still plenty of challenges in the marketplace. Many younger households are still struggling to find good paying jobs and may not have the income or savings to qualify for a mortgage."
Millennials have been slow to jump into homeownership. The generation of 18- to 34-year-olds came of age in the recession and they're starting to buy homes in their early 30s, not their mid- to late-20s like previous generations, Blackwell said.
USA TODAY
Banks ease mortgage standards
This year, Millennials are poised to overtake Baby Boomers as the nation's largest generation, so getting them to trade rent checks for mortgages is seen as critical to strengthening the housing market.
First-time homebuyers accounted for only 33% of home sales in 2014, the smallest share since 1987, according to a report from the National Association of Realtors.
Historically, first-time buyers have accounted for more than 40% of sales and have played a key role in the market, allowing established homeowners to trade up for pricier houses.
"There is an upward domino effect," said Buckley, the Iowa Realty executive. "When they enter the market, it can kick off two or three home sales right up the line."
OPTIMISM FOR 2015
Iowa real estate agents are entering the spring buying season with sense of optimism. Des Moines area home sales in January were up 13%.
“It definitely makes me want to buy now rather than keep renting. It's some incentive to start putting equity into a place.”
Laura Quint, who is looking to buy a home
"I think by the middle of March, we're going to be so busy we're not going to be able to breathe," said Monica Janelle, an Ankeny-based agent who is currently working with three 20-something clients looking for their first homes.
Laura Quint, 25, of Huxley, is looking for a two-bedroom townhouse in Ankeny with a garage and an open kitchen. She has been pre-approved for a 3%-down conventional mortgage and a 3.% down FHA mortgage.
"It definitely makes me want to buy now rather than keep renting," she said. "It's some incentive to start putting equity into a place."
Eddleman ended up putting down about $2,400 on his house. He plans to refinish the floors, renovate the kitchen and turn a bedroom into his art studio. The smell of paint still hung in the living room last week after he finished covering the pea-soup-green walls with a more muted color.
"It was a great deal for me," he said of the 3%-down loan. "The money I would have spent on the down payment I'm going to be able to spend on the house."
http://www.usatoday.com/story/money/personalfinance/2015/02/15/3-down-payments-lure-first-time-homebuyers/23424759/
Why Did This Billionaire Buy Another 5 Million Shares of Fannie Mae and Freddie Mac?
By Matthew Frankel | More Articles
February 15, 2015 | Comments (0)
According to the recently released annual report by Bruce Berkowitz's Fairholme Funds, the number of Fannie Mae (NASDAQOTCBB: FNMA ) and Freddie Mac (NASDAQOTCBB: FMCC ) shares owned by the fund increased significantly during 2014.
Even though the agencies are profitable, shares of Fannie Mae and Freddie Mac are still a gamble. Photo: Flickr user Alan Cleaver
Why is Berkowitz increasing his bet that Fannie and Freddie investors will eventually be allowed to share in the agencies' profits?
How much is Fairholme "betting" on Fannie and Freddie?
According to Fairholme's annual report, the fund owned 15.5 million shares of Fannie Mae and 14.6 million of Freddie Mac as of the end of November 2014. This shows a nice increase from the 13.7 million shares of Fannie and the 11.5 million shares of Freddie owned at the same time in 2013, to the tune of about 5 million more shares.
Despite that increase in the amount of shares owned, the fund's total investment in the agencies has decreased in value significantly. As of Nov. 30, 2013, the fund's combined positions in Fannie and Freddie were valued at $111 million. As of this writing, even after adding those millions of shares, the fund's investment is worth just $68.2 million.
Risk and reward
Simply put, the reason that Fairholme (or anyone else for that matter) invests in Fannie and Freddie is that it's hoping for a big payday. It believes that the current share price makes sense on a risk-to-reward basis.
In the case of Fannie and Freddie, whether or not shareholders will get a big payday has a lot to do with the outcome of current lawsuits against the government. Essentially, the government unilaterally decided that it would divert 100% of their profits to the U.S. Treasury as "dividends" on the bailout given during the financial crisis once the agencies became profitable.
Well, shareholders argue that they took the chance by buying the stock when the agencies were left for dead. So, now that Fannie and Freddie have returned to profitability, shouldn't shareholders receive some of the benefits?
While it's hard to argue with that logic, one judge has already ruled in favor of the government, dismissing several of the shareholders' lawsuits. Several of the various lawsuits are still pending, but it's definitely an uphill battle for those shareholders who hope to reap a reward for their investments that will most likely take years to play out.
Still, Berkowitz is not alone in believing that there is going to be a big payday for Fannie and Freddie shareholders one day in the not-too-distant future. Fellow hedge fund manager Bill Ackman, who is actually the largest holder of Fannie and Freddie's common stock, explained in a presentation how the shares could be worth between $23 and $47 if the companies were returned to the shareholders. He also said that the government's stake could result in $600 billion in additional revenue for the Treasury. For comparison, so far the government has collected about $225 billion in "dividends" from the agencies, which is $37 billion more than the original bailout amounts.
Still a lottery ticket, just a cheaper one
In my opinion, one of the primary reasons why Berkowitz decided to buy more shares of Fannie and Freddie is to reduce his average cost per share. And this is actually a pretty solid investment strategy under most circumstances -- as long as the reasons you bought the stock in the first place still apply, a drop in the share price should be seen as an opportunity.
However, in the case of Fannie and Freddie, it's important to appreciate just how much of a gamble (however calculated it may be) Berkowitz is taking. The odds are definitely stacked against the GSEs' shareholders, and their share prices are much more likely to go to zero than to produce massive gains. After all, one judge has already set something of a precedent by throwing out several of the shareholders' lawsuits, and there is an ongoing effort in Congress to eliminate the agencies altogether.
Berkowitz still is taking a gamble with his investments in Fannie and Freddie. It's just a slightly discounted gamble now.
http://www.fool.com/investing/general/2015/02/15/why-did-this-billionaire-buy-another-5-million-sha.aspx
The timing of the NYT article and Friday's pop may not be a coincidence. As of yet we still do not have a reason for that big move but maybe select reporters are being told to groom the public. Over 30 mil. in volume. Lots of buying. Some very large blocks. Big money had a chance to load up. Release coming. I don't know when but I bet is a lot of embarassing and/or incriminating info in the protected documents. Let's see if a spin comes out of D.C. soon supporting release for the good of truth( as in keep the truth burried ) justice (as in avoid being brought to justice )and the American way (as in the Patomac two step. American politics as usual )Chuckle chuckle.
Representative BamBam is an AYE !
H.R.574 -- Pay Back the Taxpayers Act of 2015 (Introduced in House - IH)
HR 574 IH
114th CONGRESS
1st Session
H. R. 574
To prohibit contributions by Fannie Mae and Freddie Mac to the Housing Trust Fund and the Capital Market Fund while such enterprises are in conservatorship or receivership, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
January 27, 2015
Mr. ROYCE (for himself, Mr. LUCAS, Mr. GARRETT, Mr. NEUGEBAUER, Mr. WESTMORELAND, Mr. HUIZENGA of Michigan, Mr. FINCHER, Mr. STUTZMAN, Mr. MULVANEY, Mr. HULTGREN, Mr. PITTENGER, Mr. BARR, and Mr. WILLIAMS) introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To prohibit contributions by Fannie Mae and Freddie Mac to the Housing Trust Fund and the Capital Market Fund while such enterprises are in conservatorship or receivership, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Pay Back the Taxpayers Act of 2015'.
SEC. 2. PROHIBITION OF CONTRIBUTIONS TO HOUSING TRUST FUND AND CAPITAL MAGNET FUND WHILE ENTERPRISES ARE IN CONSERVATORSHIP OR RECEIVERSHIP.
(a) In General- Notwithstanding section 1337 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) or any other provision of law, after the date of the enactment of this Act, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall not, during the term of any conservatorship or receivership of such an enterprise pursuant to section 1367 of such Act (12 U.S.C. 4617), make any contribution or transfer to, or allocate or set aside any amounts for, the Housing Trust Fund established under section 1338 of such Act (12 U.S.C. 4568) or the Capital Magnet Fund established under section 1339 of such Act (12 U.S.C. 4569).
(b) Treatment of Amounts Previously Set Aside- Any amounts that, before the date of the enactment of this Act, have been set aside by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation for the Housing Trust Fund or the Capital Magnet Fund referred to in subsection (a) of this section but not yet allocated or transferred to such a Fund shall not be so allocated or transferred but shall be covered into the General Fund of the Treasury and shall be used only for reducing the budget deficit of the Federal Government.
SEC. 3. USE OF ENTERPRISE REPAYMENTS TO REDUCE BUDGET DEFICIT.
After the date of the enactment of this Act, any amounts paid or repaid to the Secretary of the Treasury by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, during the term of any conservatorship or receivership of such enterprise pursuant to section 1367 of such Act (12 U.S.C. 4617) and in any form, including any dividends paid pursuant to the Amended and Restated Senior Preferred Stock Purchase Agreements, dated September 26, 2008, amended May 6, 2009, further amended December 24, 2009, and further amended August 17, 2012, between the United States Department of the Treasury and the Federal National Mortgage Association, and between such Department and the Federal Home Loan Mortgage Corporation, shall be covered into the General Fund of the Treasury and shall be used only for reducing the budget deficit of the Federal Government.
http://thomas.loc.gov/cgi-bin/query/z?c114:H.R.+574:
Survey Results Mean Good News for Job Market, Housing
Author: Brian Honea February 13, 2015 0
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Philadelphia Fed Job Market HousingA survey conducted among economists by the Federal Reserve Bank of Philadelphia on economic growth in the United States released on Friday revealed that predictions have been revised upward for the labor market – which means good news for the economy and for housing recovery.
The Philadelphia Fed surveyed 39 economic forecasters, and though their predictions regarding GDP and overall economic growth were little changed from the same survey conducted three months earlier, the forecasts for job gains and labor markets were much improved.
"It's got to be positive for housing, because all your consumer numbers are going in the same direction," said managing director and chief economist with Wells Fargo, who was one of the 39 panelists to participate in the survey. "With more jobs, higher wages, and income growth, you always see an increase in consumer confidence."
The panelists predicted an annual growth rate for the GDP of 2.7 this quarter, 3.0 for the next quarter, and 3.2 percent for 2015 on an annual-average over annual-average basis (0.2 percentage points higher than the previous estimate). Real GDP is expected to grow at an annualized rate of 2.9 percent in 2016 and 2.7 percent in both 2017 and 2018.
The projections for the national unemployment rate for this year and the next two years were below those reported last survey – the panelists predicted this year it will be an annual average of 5.4 percent and will tick downward for the next three years. It is predicted to be below 5.0 percent (4.9 percent) in 2017.
The original estimates for job gains for the next four quarters were revised upward from the survey of three months earlier, however. The panelists said they expected jobs to grow at a rate of 269,300 jobs per month this quarter. Though job gains are predicted to be somewhat less for the next three quarters, they are still forecasted to be above 200,000 per month. Forecasters predict an average monthly job gain of 252,500 for this year and 213,600 for 2016.
"If you're going to get 200,000 jobs per month, you're probably going to get 2.5 to 3 percent GDP," Silvia said. "That's pretty much trend economic growth."
The predictions for the declining unemployment rate for the next three years in the Philadelphia Fed survey came through despite last week's announcement from the U.S. Bureau of Labor Statistics (BLS) that the national unemployment rate actually increased slightly from December to January (5.6 percent to 5.7 percent) despite a solid job gain of 257,000 for January. In reaction to that report, Fannie Mae chief economist Doug Duncan said he believed that "stronger hiring and firming income growth will be the primary catalysts for a faster pace of housing recovery in 2015."
Analysts believe that the economy has recovered enough for the Federal Reserve to begin raising interest rates – but they do not believe it will happen overnight. Fed officials have stated they are not in a hurry to raise the rates.
"They won't be very aggressive," Silvia said. "They might raise the rates 50 basis points this year and 50 to 75 points next year."
http://dsnews.com/news/02-13-2015/survey-results-mean-good-news-for-job-market-housing
I know what happened. FNMA rose over 15%. I will speculate that the reason, when we find out, will be positive news.