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I went on th717 website and the last post I can find is from yesterday.
Iowa court proceedings video "READ THE STATUTE"
Housing: From Deep Hole to Whimper Dec 18 2014, 11:56AM
Referring to its "roller-coaster pattern of economic growth," Fannie Mae summarized the economy and housing in 2014 as a year that started with a deep hole and ended with a whimper. A brutally cold first quarter put economic growth in that deep hole at the beginning but it came back "with a vengeance" making the second quarter the strongest for growth in more than two years. The third quarter saw growth flag again and it "is poised to weaken further, as some unsustainable forces that drove activity in the third quarter reverse in the final quarter."
Fannie Mae's Macroeconomic Forecasting Team headed by Senior Vice President and Chief Economist Doug Duncan reprise 2014 in the December edition of its Economic and Strategic Research report. They see the year overall as one in which economic growth comes in at what they call an unspectacular pace of 2.1 percent, 1 percentage point below the 2013 pace. Next year however will be better, driven by improving private domestic demand, a better outlook for consumer income, rising consumer and business confidence, a broadening housing recovery and they expect full year 2015 growth of 2.7 percent.
The rising trend of the "quits rate," a key indicator of labor market confidence from the Job Openings and Labor Turnover Survey (JOLTS) supports, the Team says, its view that wage gains are poised to accelerate. Private wages in the Employment Cost Index tend to lag the quits rate. Such improving income prospects they say are key to increasing the sub-par rate of housing formation but the full recovery of the housing sector will require truly meaningful gains in that income.
This year has been a disappointing one for housing recovery. Improvement was tentative, especially for the single-family sector which was held back first by the aforementioned severe winter weather and then by a spike in mortgage rates. While rates have stabilized, demand remains low as homebuyers have not yet moved aggressively into the void left by exiting investors.
Recent indicators, the economists say, have been generally positive; existing home sales were up in both September and October, increasing to the highest levels since the previous fall, and inventories reached their lowest levels since March. New home sales, however, improved little in the last half of the year.
Nonetheless the National Association of Home Builders' measure of builder confidence rebounded sharply in November although building itself has been mixed all year. Multifamily building starts have been the strongest since 2006 and are expected to post double-digit gains for the fourth straight year while single family permits and starts have been much more modest with starts up only 10 percent from last year. All residential construction starts are expected to come in below one million units which the economists called "anemic" by historical standards.
Most of the major indexes continue to show price growth moderating. Still tight inventories continue to support healthy price gains even in the face of soft homebuyer demand.
The Team says it expects 2015 will bring "a broad-based but measured housing recovery amid improving consumer sentiment and income growth, slowly easing lending standards, and continued historically low mortgage rates." Long term Treasury yield will remain depressed because of soft spots in several of the globe's economies and they expect that, as the Federal Reserve begins to raise short-term interest rates in the third quarter of 2015, the yield curve will flatten further. Fixed mortgage interest rates are expected to stay below 4.5 percent through 2015, continuing to support the housing market.
Fannie Mae projects housing starts will increase about 22 percent and total home sales will grow about by about 5 percent after finishing 2014 down 3 percent. Applications for refinancing, according to the Mortgage Bankers Association, have plummeted, "setting the stage for a purchase market in 2015."
Total mortgage applications are expected to edge up next year, after falling almost 40 percent this year. Fannie Mae projects originations to total $1.13 trillion reflecting an increase in purchasing that will slightly more than offset an expected decline in refinancing of 37 percent. This drop will be in addition to an expected decrease of 40 percent in refinancing in 2014 and 60 percent in 2013. Total single-family (1- to 4-unit properties) mortgage debt outstanding should post a slight decline in 2014 before picking up modestly in coming years.
http://www.mortgagenewsdaily.com/12182014_fannie_mae_forecast.asp
Just looks like one big marlin to me.
Bill Ackman Just Can’t Help Himself
By Bess Levin
ackmanBill Ackman sat in the hair and makeup chair at Bloomberg, waiting for his lieutenants to file in for a quick briefing before he went on the air. He knew what they were going to say and what they needed to hear him say before they’d be comfortable with him getting in front of the camera.
“Now what are you going to do when they ask you about Herbalife, Bill?”
“I’m going to speak about it in a measured tone. I’m going to manage expectations.”
“And why are you going to do that?”
“Because even if it’s true the company is a fraud, it doesn’t mean it’s going out of business tomorrow so we shouldn’t tell people to expect it, even though… [mumbles something about how he knows it will]…”
“What was that?”
“Nothing.”
“Okay, and what are you not going to do?”
“I’m not going to give an exact date in the near future when the company is going to explode.”
“And?”
“And I’m not going to use the word ‘explode’.”
“And?”
“And I’m not going to say ‘If Herbalife doesn’t go out of business in the next 365 days, I’ll give up solid food and subsist only on their shakes and supplements for a calendar year.”
The lieutenants looks at each other and nodded. They weren’t 100% sure they could believe him but this was as close as confirmation as they were going to get. And, to be fair, since the incident in July, he’d kept his promise. His promise to them, sure, but also his promise to himself. It’s not like he liked doing this. It’s not like he wanted to build up expectations re: the demise of Herbalife only to have them fail. But every time he got up on that stage, or in front of a camera, or on the phone with CNBC, something inside him took over and made him blurt out stuff like “Call the coroner, ’cause there’s gonna be a murder tomorrow, of the corporate variety” or “Get all the shakes you can now because in a fortnight, they’re gonna be gone” or “If Herbalife doesn’t go out of business by next week, my name’s not William A. Ackman.”
He wanted to dial down the enthusiasm. He really did.
But we don’t always get the things we want.
“I think this will be a 2015 event—the implosion of the company. I think worst case, early 2016. What gives me confidence is that the company has $1.150 billion of debt that comes due in early March 2016. They are not going to be able to refinance that credit facility. They do not have hard assets to provide security. The banks who provided that facility provided it before the government investigations and all the regulations.”
http://dealbreaker.com/2014/12/bill-ackman-just-cant-help-himself/
Is there a Fed. Meeting today?
I like what I read but I wouldn't want TH717 or anyone else jumping the gun. I would like to another (proper) quote from Schumer.
Navy, I read and also posted the article. It seems that the one that I read stated that FnF have paid in full but it was the author who stated it and not Senator Schumer
FUNDING THE NATIONAL HOUSING TRUST FUND
Posted on Dec 17, 2014 10:00am PST
SCHUMER APPLAUDS FHFA DIRECTOR MEL WATT FOR ORDERING THE CAPITALIZATION OF THE NATIONAL HOUSING TRUST FUND
Schumer Authored Legislation to Create National Housing Trust Fund in 2008 – Now This Fund Will Be Capitalized & Funded Through Fannie Mae & Freddie Mac
Housing Trust Funding To Help Build Much-Needed Affordable Rental Housing In New York City; Will Help Rebuild & Revitalize Low-Income Communities Through Construction, Rehab & Preservation of Rental Housing
Last week, U.S. Senator Charles E. Schumer today applauded the decision by FHFA Director Mel Watt to order Fannie Mae and Freddie Mac to begin capitalizing the National Housing Trust Fund and the Capital Magnet Fund. This critical investment will help rebuild and revitalize low-income communities by providing funds for the construction, rehabilitation, and preservation of rental housing to extremely low-income families.
“New Yorkers know painfully well that it is becoming extremely difficult to afford the rising cost of rent. The decision by the FHFA to fund the National Housing Trust Fund and the Capital Magnet Fund will bring millions of dollars to New York for rental housing and is a step in the right direction to help ensure that hardworking New York families have safe and affordable places to live,” said Senator Schumer.
The NHTF was established in July 2008 as part of the Housing and Economic Recovery Act of 2008 (HERA). This law required that Fannie Mae and Freddie Mac pay 4.2 basis points of their annual volume of business to the two funds. The requirement that Fannie Mae and Freddie Mac contribute to the two funds was suspended when the companies were taken into conservatorship in September 2008 during the financial crisis. Fannie Mae and Freddie Mac have since fully repaid the taxpayers.
In addition to being one of the authors on the legislation to create the National Housing Trust Fund, Senator Schumer along with 32 of his Senator Colleagues wrote to FHFA Director Mel Watt urging him to fund the National Housing Trust Fund and The Capital Magnet Fund.
http://www.nyrealestatelawblog.com/Manhattan-Litigation-Blog/2014/December/FUNDING-THE-NATIONAL-HOUSING-TRUST-FUND.aspx
Is there a link available?
Board?
Does 20 mil. Get him a seat on the b [ard?
Climbing back... $2.24
Countrywide Whistle-Blower to Receive More Than $57 Million
Countrywide was acquired by Bank of America in early 2008.
Richard A. Brooks / Agence France-Presse — Getty Images
By MATTHEW GOLDSTEIN
December 17, 2014
A former Countrywide Financial executive who turned financial crisis whistle-blower is collecting more than $57 million for his effort in helping federal prosecutors force Bank of America to pay a record $16.65 billion penalty in connection with its role in churning out shoddy mortgage securities.
Edward O’Donnell reached an agreement last week with the federal government that enables him to collect part of the settlement that Bank of America agreed to pay in August in a deal with federal prosecutors and a number of state attorneys generals, according to a court filing. The payment to Mr. O’Donnell arises from a federal civil lawsuit he filed under the False Claims Act earlier this year and which Preet Bharara, the United States attorney for Manhattan, joined and used as the basis for pressing Bank of America to reach a deal.
“In my opinion, Edward O’Donnell is the person most responsible for bolstering the bank settlements and holding Wall Street accountable,” said David G. Wasinger, the lawyer for Mr. O’Donnell, who worked at Countrywide from 2003 to 2009.
Mr. O’Donnell’s role in providing ammunition to the federal prosecutors who pursued the so-called global settlement with Bank of America was not previously known until it was disclosed in the court filing. However, this is not the first time Mr. O’Donnell has served as a critical whistle-blower in helping the government pursue claims against Bank of America and, more specifically, Countrywide, the once dominant mortgage lender that Bank of America acquired in early 2008.
An earlier false-claims lawsuit filed by Mr. O’Donnell was instrumental in Mr. Bharara’s pursuit of a civil fraud claim against Bank of America and a former Countrywide official for selling shoddy mortgages. The lawsuit centered on a program at Countrywide nicknamed the hustle, which rewarded employees for producing more loans regardless of the quality.
In July, a federal judge ordered Bank of America to pay a $1.27 billion penalty in that case. The former Countrywide executive who faced civil action in that lawsuit, Rebecca Mairone, was ordered to pay a $1 million fine for her role in directing the program.
Mr. Wasinger said a financial settlement with the federal government concerning Mr. O’Donnell’s role in the hustle case has yet to be decided.
Until a few weeks ago, Mr. O’Donnell had been an employee of Fannie Mae, Mr. Wasinger said.
Mr. O’Donnell may not be the only whistle-blower who stands to collect a chunk of Bank of America’s payout to the federal government. The United States settlement with Bank of America mentions three other false-claims lawsuits brought against the bank. The names of those whistle-blowers, just like Mr. O’Donnell’s, were not identified in the settlement agreement.
The government’s agreement with Mr. O’Donnell arises from the portion of the global settlement that Bank of America reached with federal prosecutors and California, Delaware, Illinois, Kentucky, Maryland and New York. It values that portion of the settlement at $350 million and said Mr. O’Donnell was entitled to a 16 percent share of it.
In addition, Mr. O’Donnell is collecting a separate $1.6 million payment from Bank of America, according to the settlement.
A spokesman for Mr. Bharara was not immediately available for comment. A Bank of America spokesman not immediately available for comment as well.
http://mobile.nytimes.com/blogs/dealbook/2014/12/17/countrywide-whistle-blower-to-receive-more-than-57-million/?_r=0&referrer=
Always wondering, keep the posts coming much appreciated. Stuck with my phone today so I can't check for myself.
The CBO Takes On Fannie Mae, Freddie Mac Reform
Posted By: Michael IdePosted date: December 17, 2014 10:06:26 AMIn: BusinessNo Comments
The Congressional Budget Office (CBO) has released a report analyzing the expected costs and consequences of the main alternatives to Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC). A lot of its conclusions are straightforward, less government involvement in the secondary mortgage market probably means higher interest rates on home loans, but the CBO disputes the worst-case scenarios put out by some advocates of returning to private GSEs.
“Under any of the transitions that CBO examined, the agency expects that most borrowers would still be able to take out 30-year fixed rate mortgages,” says the CBO report.
Fannie Mae – How CBO accounts for the GSEs
The CBO has taken a different stance on the GSE’s than the Obama administration since the beginning of the conservatorship. The Treasury Department in other parts of the executive branch still treat Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) as external entities and account for dividend payments as income. The CBO accounts for the GSEs according to the rules set by the Federal Credit Reform Act of 1990, which is similar to accrual accounting with a discount for overall market risk. That means the CBO assumes that Fannie and Freddie are already fully owned by the federal government, and that the dividend payments are transfers from one branch of government to another. Since the CBO’s rule is to advise on the cost of different policy decisions, it doesn’t comment on shareholder rights, litigation, or any of the other political wrangling surrounding the GSEs.
On this basis, the CBO says that government support of the GSEs will cost $4 billion in 2015 and $19 billion between 2015 and 2019 in implicit subsidies because that’s the difference between market price and what the agencies are projected to charge for loan guarantees (assuming no policy changes).
Fannie Mae – Reducing GSE market share under the current system
before it delves into alternative structures for housing finance, the CBO points out that the market share of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) is already falling. Even with the VA and the FHA ensuring more mortgages, overall the government’s share of the secondary mortgage market has fallen from 80% in 2013 to 70% in the first half of 2014, and the CBO thinks it will fall to 50% in the next decade without any other changes.
CBO secondary mortg markt share 1214 Fannie Mae
Even without congressional action, FHFA director Mel Watt can increase guarantee fees, set lower loan limits, or even set Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp’s (OTCBB:FMCC) actual market share with g-fee auctions, selling a set number of guarantees to the highest bidder. An increase in g-fees of 50 basis points over the next 10 years, for example, is projected to cut Fannie Mae and Freddie Mac volumes to about a fifth of the current levels.
Fannie Mae – Deciding which system we want to have in place during a crisis
Keeping Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) contact isn’t meant to be a long-term plan, and the CBO looks at four alternatives for what could come next: a single federal agency that guarantees eligible mortgage-backed securities, a hybrid system with private investors in the government share credit risk with private investors in the first loss position, mostly private secondary market with the government playing role of guarantor of last resort who only guarantees mortgages during the credit crunch to prevent the housing market from collapsing, or a fully private secondary market with no federal involvement.
Each of those four market structures would have its own advantages and disadvantages in the following areas: ensuring a stable supply of financing for mortgages, protecting taxpayers from risk, providing incentives to control risk taking in the mortgage finance system, and making the allocation of credit risk between the government and the private sector transparent,” says the report.
Without even getting into specifics the fourth option has a credibility problem, it doesn’t seem politically feasible for the government to sit back and do nothing the next time we had a housing crisis. A single federal agency sounds a lot like a common securitization platform (CSP) currently being developed by Watt, the hybrid system is basically the Crapo Johnson plan that failed to get Congressional support earlier this year, and the guarantor of last resort is basically the realistic version of the free market approach advocated by Representative Jeb Hensarling and other far right conservatives.
cbo 4 options effects 1214 cbo 4 paths housing impacts 1214
What’s striking is that the CBO seems to think that the differences between these plans isn’t that significant is always the market is stable. Less government involvement means higher interest rates, which also translates to lower housing prices, but it argues that 30 year fixed-rate mortgages will mostly still be available for slightly to moderately higher rates. The bigger question seems to be, what kind of system do we want to have in place during the next crisis.
http://www.valuewalk.com/2014/12/the-cbo-takes-on-fannie-mae-freddie-mac-reform/
Agreed
Investors Want a Piece of Fannie and Freddie
6:31 PMTue, Dec 16, 2014By Sarah Boden
Credit Dale Calder
Adjustable-rate mortgages lead to the subprime mortgage crisis. This practice played a large part in Fannie Mae and Freddie Mac’s 2008 insolvency.
Urbandale’s Continental Western and other investors in Fannie Mae and Freddie Mac aren't receiving dividend checks since all profits from the mortgage lenders are being turned over to the U.S. Treasury.
Listen
Listening...
0:56
If the federal government hadn’t spent $187 billion to bail out Fannie Mae and Freddie Mac during the 2008 Financial Crisis, the mortgage giants would have tanked.
Today Fannie and Freddie are making billions, under a conservatorship with the Federal Housing Finance Agency (FHFA.)
Originally, 10 percent of Fannie-Freddie-dividends went to the federal government. But in 2012 the FHFA decided all the profits would go to the government.
Continental Western's team of lawyers includes former GOP senate candidate Matt Whitaker and famous litigator Charles Cooper. In 2013 Cooper defended Proposition 8, California's ban on same-sex marriage in front of the U.S. Supreme Court.
Tim Pagliara is the executive director of Tennessee-based Investors Unite, which represents investors of Fannie and Freddie. He says this new arrangement isn’t fair.
"They’ve nationalized the housing industry," says Pagliara. "This is what Chavez did to the oil companies in Venezuela….we don’t operate like that in this country."
The Department of Justice declined to comment. However, today at Des Moines U.S. District Courthouse DOJ lawyer Howard Cayne says since Fannie and Freddie willingly entered into the conservatorship, investors have no legal recourse.
Judge Robert Pratt has yet to rule on Continental Western’s right to challenge the FHFA.
http://m.iowapublicradio.org/?utm_referrer=#mobile/50726
When it starts to bounce around quickly like this I can't help but to think there is inside info leaking out to a priveleged few
I think it was Rocco or Vargis that predicted this kind volitility prior to release. I am not suggesting anything but the memory of that post has stayed with me. I wish I could rmrember who posted it.
I guess I can take it. I Don't even feel it any more.
Stage Set to Revive First-Time Buyer Market. Daily Real Estate News | Friday, December 12, 2014
The move by Fannie Mae and Freddie Mac this week to offer 3 percent down payment loans may reignite the first-time home buyer market.
Prior to this week's announcement, Fannie Mae and Freddie Mac issued loans with a minimum of a 5 percent down payment—however, the standard down payment for mortgages insured through Freddie Mac and Fannie Mae was 20 percent, the Associated Press reports.
That meant a first-time buyer would need about $41,600 in cash to buy a median-priced home of $208,300, according to National Association of REALTORS® housing data. With a 3 percent down payment, buyers would need a fraction of that – about $6,200 to close on a loan.
That may make home ownership more feasible for first-time buyers. A recent study by RealtyTrac showed that it can take on average 12.5 years for first-time buyers to save up a 20 percent down payment based on a current personal savings rate at 5.6 percent. The figure also takes into account current median home prices.
In October, only 29 percent of home purchases were from first-time buyers – way below the historic average of 40 percent, NAR reported. NAR issued a report last month that showed despite an improving job market and low interest rates, the share of first-time buyers had fallen to its lowest point in nearly three decades.
The new loans announced by Fannie Mae and Freddie Mac will be fixed-rate mortgages for up to 30 years, available only on a primary residence. Fannie plans to begin issuing the 3 percent loans before the end of the year. Mortgage insurance payments will be required, and qualified buyers will need to complete a financial counseling program.
Freddie Mac plans to start issuing its 3 percent loans to low- and moderate-income borrowers in March 2015. Eligible borrowers will be required to earn less than an area’s median income and will also have to pay mortgage insurance and undergo financial counseling to participate. Monthly payments also will have to fall under 43 percent of the borrower’s income.
Source: “More Americans to Buy Homes with 3 Percent Down,” The Associated Press (Dec. 11, 2014)
http://realtormag.realtor.org/daily-news/2014/12/12/stage-set-revive-first-time-buyer-market
This link was posted but here is the whole thing.Fannie Mae Seeking More Business At Mortgage Banker Conference
Posted By: Michael IdePosted date: December 11, 2014 10:56:49 AMIn: BusinessNo Comments
Officially, the Federal Housing Finance Agency (FHFA) is still winding down Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC), one of the few things both parties agree on these days, but the real story is more complicated. FHFA chief Mel Watt is preparing for an uncertain future of government involvement in the housing market, and according to Rafferty Capital Markets VP of equity research Richard Bove the GSEs are actively looking for more business.
“This change in attitudes was very evident in a Mortgage Banker Conference in San Diego last week in which all three of the GSEs spoke. They asked for more business according to press reports,” writes Bove. “Some representatives of these companies went so far as to compliment the mortgage bankers for delivering more mortgages to their companies as banks pulled back. These statements are totally contrary to the belief that the government will shut down Fannie and Freddie.”
Bove’s updated thesis includes the CSP
Bove’s argument is that the administration has quietly changed its position and that it actually wants to return Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) to private sector ownership after witnessing slow growth in the housing sector, especially among lower income buyers. The creation of the Common Securitization Platform (CSP) has changed his thesis slightly, he now thinks that a merged entity will be privatized instead of the two GSEs separately, but this is essentially the position that Bove has been maintaining for more than a year.
Fannie Mae: A simpler explanation is to take Watt at his word
Watt is certainly in no rush to shut down Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC), but there is a much simpler explanation that fits what we’re seeing. We can simply choose to take Watt at his word that the creation of the CSP is his attempt to ease the transition to some future system without knowing what that system will be (you can check his recent Congressional testimony to see how frustrated he clearly is). That’s not nearly as exciting for GSE longs, but it’s a straightforward reading of recent changes in policy. Bove may prove to be right in the end, but so far we don’t have any indication from Watt that he plans to use his authority to release the GSEs from conservatorship.
http://www.valuewalk.com/2014/12/fannie-mae-seeks-business-at-mortgage-banker-conference/
Weekly Wrap: Someday My Bailout Will Come; Chief Ethics Officers?
DEC 12, 2014 12:00pm ET
Spotlight on Ethics: Banks should make their commitment to ethics more visible in order to reboot their reputations, write BuckleySandler partners Jeremiah Buckley and Thomas Sporkin. To that end, they suggest that banks consider appointing a chief ethics officer and building ethical considerations explicitly into their decision-making processes. One reader took issue with the idea of appointing an officer in charge of ethics, arguing that this should be the chief executive's responsibility. "Delegating this role to another is admitting a lack of commitment to sound business practices," wrote commenter "rmahoney6." Another commenter suggested that the "mundane, individual choices" that ultimately determine an organization's ethical culture can't be standardized. Reader "KJHandly" expanded on that line of thinking, wondering, "Is the appropriate focus on ethics at the corporate or the individual level, or both?"
No Silver Bullet: Raising banks' capital requirements is only one part of the equation for ensuring the safety of the financial system, according to Allan Grody and Peter Hughes of Financial InterGroup Holdings. They say it's equally important for regulators to encourage a stronger approach to risk management and technological infrastructures that support that goal. "We need a 'firm-at-risk' risk management regime, not just the 'capital-at-risk' one that we have now," the authors write.
Also on the blog: Brazil is primed for a surge in mobile payments, according to Bethan Cowper, head of international marketing at Compass Plus. Noma Bruton, chief human resources officer of Pacific Mercantile Bank, offers up some hiring advice for modern-day lenders.
The financial industry is weaker for embracing a someday-my-prince-will-come mentality, with regulators cast in the role of the dashing rescuer, according to Hester Peirce of the Mercatus Center. Sometimes regulators are more adversaries than saviors, business and commercial litigator Mark Belongia writes. He notes a spike in the Federal Deposit Insurance Corp.'s efforts to bar directors and officers of failed banks from the industry.
The Consumer Financial Protection Bureau should avoid emulating Colorado's payday lending reforms as it weighs new regulations for the industry, according to Lauren Saunders of the National Consumer Law Center. Meanwhile, the Obama administration should allow Fannie Mae and Freddie Mac to start keeping a portion of their profits in order to build up capital, writes Paulina McGrath, chair of the Community Mortgage Lenders of America. Barring that, the government could at least lower guarantee fees, she says, since it's not like the additional revenue is helping to revitalize the agencies.
Cash in hand isn't the same thing as cash in the bank, so allowing companies to conflate the two on their books is a risky practice, according to Bill Bergman, director of research for Truth in Accounting and a former Fed economist. "Accounting standards that give carte blanche to 'cash and cash equivalents,' assuming they are safe and hold unchanging value, are at odds with market discipline," he writes.
http://www.americanbanker.com/bankthink/weekly-wrap-someday-my-bailout-will-come-chief-ethics-officers-1071641-1.html
Top Fed Policy Group Brought Up Leak to Private Newsletter
Answering a ProPublica records request, the Federal Reserve acknowledged a leak Federal Open Market Committee information but declined to release the committee’s transcripts on the matter.
by Jake Bernstein
ProPublica, Dec. 12, 2014, 10:42 a.m.
This is part of an ongoing investigation:
A confidential report and a fired examiner’s hidden recorder penetrate the cloistered world of Wall Street’s top regulator — and its history of deference to banks.
Leak at Federal Reserve Revealed Confidential Bond-Buying Details
The Board of Governors of the Federal Reserve seal outside the board room in Washington, D.C. (Andrew Harrer/Bloomberg via Getty Images)
A leak of potentially market moving information from the Federal Reserve became a topic of conversation in the high-level Fed group that sets monetary policy.
Responding to a Freedom of Information Act request from ProPublica, the Federal Reserve acknowledged that the leak of confidential material to an investor newsletter is referenced in nine pages of transcripts of meetings of the Federal Open Market Committee in late 2012 and early 2013.
As we reported earlier, the October 2012 newsletter by the market intelligence firm Medley Global Advisors contained detailed and closely held information about what Fed leaders were thinking and what would be in the minutes of an FOMC meeting the day before they were publicly released.
The leak upset many members of the committee, which sets central bank policies that influence interest rates and credit. The group's deliberations take place in private, but the Fed routinely releases a summary three weeks later.
After the group's September 2012 meeting, then-Chairman Ben Bernanke asked the Fed's general counsel and secretary to find out how details about the session got into the newsletter. Bernanke also asked them to look into other leaks from the September meeting that appeared in a Wall Street Journal story.
Until now, the Fed has not publicly acknowledged anything about the leaks.
In the FOIA request, ProPublica asked for "any and all references in the FOMC transcripts between October 23, 2012 and March 20, 2013 that were made by any FOMC participant (including name) relating to leaks of information" found in the Medley newsletter or Journal.
In its response, the Fed said its staff "reviewed the transcripts of the four FOMC meetings during the timeframe given in your request and located approximately nine pages of responsive information."
The Fed declined to release the material, citing a FOIA exemption for "pre-decisional, deliberative communications" by the committee. Instead, the transcripts will be made public in 2018, according to the board's long-standing policy of waiting five years, the Fed said in its response.
A Fed spokeswoman declined further comment.
Leaks to news media about FOMC deliberations are not unprecedented, but the information is usually widely disseminated. In this case, the newsletter containing the inside information was available only to Medley's private clients, who in theory could have traded on it.
Past leaks have prompted the chairman of the Federal Reserve to call in the inspector general or other outside investigative agencies. The Fed has declined to say what came of the inquiry Bernanke launched or answer other questions submitted by ProPublica.
http://www.propublica.org/article/top-fed-policy-group-brought-up-leak-to-private-newsletter
Here is another example of disinformation. Read what this jackass has to say.
Rep. Royce Disappointed in FHFA Housing Trust Fund Decision
December 12, 2014by California RealEstateRama
Government and Public Real Estate News: Property News, Housing News, Grant News, Mortgage News, Foreclosure News
WASHINGTON, D.C. – December 12, 2014 – (RealEstateRama) — U.S. Representative Ed Royce (R-CA) released the following statement in response to the Federal Housing Finance Agency’s (FHFA) announcement that it will divert money to the Housing Trust Fund and the Capital Magnet Fund pursuant to the Agency’s interpretation of the Housing and Economic Recovery Act of 2008 (HERA):
“Contrary to what Fannie and Freddie apologists claim, the GSEs have yet to repay any of the taxpayer-funded bailout funds they received, which makes today’s announcement by the FHFA outrageous. Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with.”
Rep. Royce, a senior member of the House Financial Services Committee, authored the Pay Back the Taxpayers Act of 2014 to specifically prohibit contributions by Fannie Mae and Freddie Mac to the Housing Trust Fund and the Capital Market Fund while the institutions are in conservatorship or receivership.
Rep. Royce also joined House Financial Services Chairman Jeb Hensarling (R-TX) in a writing a letter to FHFA Director Mel Watt urging the continuation of the FHFA’s five-year-old policy of suspending contributions to the Housing Trust Fund and the Capital Magnet Fund.
Additionally, during consideration of the FY 2015 Transportation, Housing and Urban Development Appropriations bill, the House unanimously adopted an amendment authored by Rep. Royce which prohibits the GSEs from distributing funds to both the Housing Trust Fund and the Capital Magnet Fund.
- See more at: http://www.realestaterama.com/2014/12/12/rep-royce-disappointed-in-fhfa-housing-trust-fund-decision-ID025445.html#sthash.jxx8MDPW.dpuf
http://www.realestaterama.com/2014/12/12/rep-royce-disappointed-in-fhfa-housing-trust-fund-decision-ID025445.html
Yea sorry, but don't blame me for posting what our schizophrenic elected officials choose to say in public along with misinformation/disinformation and ignorance published by the media. I just post what I find out there. I figure it is better know what is in the media than not know. Maybe I am wrong since it so frustrating.
This irks me. First he introduces a bill to kill FnF then he applauds using them being used to fund the housing trust fund which they could not do if they didn't exist. Which way will the wind blow tomorrow?
JOHNSON STATEMENT ON FHFA ANNOUNCEMENT TO FUND HOUSING TRUST FUND AND CAPITAL MAGNET FUND December 12, 2014 by RealEstateRama Government and Public Real Estate News: Property News, Housing News, Grant News, Mortgage News, Foreclosure News WASHINGTON, D.C. – December 12, 2014 – (RealEstateRama) — Senate Banking Committee Chairman Tim Johnson (D-SD) released the following statement regarding today’s announcement by the Federal Housing Finance Agency to direct Fannie Mae and Freddie Mac to allocate funding for the Housing Trust Fund and the Capital Magnet Fund. “Today’s announcement by the Federal Housing Finance Agency to fund the Housing Trust Fund and the Capital Magnet Fund is good news for millions of Americans seeking affordable and permanent housing. These Funds have received bipartisan support since first being authorized in 2008, and will help address the challenges facing states, non-profit organizations, and the housing industry as they seek to build and maintain housing that is within reach of working families, the elderly, and our veterans. I applaud Director Mel Watt for his leadership on this issue and continued dedication to improving housing opportunities for low-income families across our nation.” - See more at: http://www.realestaterama.com/2014/12/12/johnson-statement-on-fhfa-announcement-to-fund-housing-trust-fund-and-capital-magnet-fund-ID025442.html#sthash.R4gW4pFy.dpuf
http://www.realestaterama.com/2014/12/12/johnson-statement-on-fhfa-announcement-to-fund-housing-trust-fund-and-capital-magnet-fund-ID025442.html
Yes it is amazing that there still so many misinformed people out there. I can not decide if it is ignorance or a misinformation/disinformation conspiracy. Maybe it is both.
FHFA Director Delivers Lump of Coal to Every Taxpayer December 12, 2014 by RealEstateRama Government and Public Real Estate News: Property News, Housing News, Grant News, Mortgage News, Foreclosure News WASHINGTON, D.C. – December 12, 2014 – (RealEstateRama) — Financial Services Committee Chairman Jeb Hensarling (R-TX) today issued the following statement concerning Federal Housing Finance Agency Director Mel Watt’s decision to begin payments from Fannie Mae and Freddie Mac to the Housing Trust Fund and the Capital Magnet Fund: “In taking this action, Director Watt is making a grave mistake that harms hardworking taxpayers and violates both the letter and spirit of the law. Today’s announcement was clearly timed for the end of the congressional session in a transparent effort to evade scrutiny and frustrate congressional oversight. That will not happen because the Financial Services Committee will call Director Watt to testify as soon as the next session of Congress begins in early January. Fannie Mae and Freddie Mac were at the epicenter of the 2008 financial crisis that threw millions of Americans out of work and destroyed trillions of dollars of household wealth. The nearly $200 billion bailout of Fannie and Freddie is still the biggest, costliest taxpayer-funded bailout in history, and contrary to what some claim, they have yet to ‘repay’ taxpayers one thin dime. Diverting assets to housing trust funds instead of repaying taxpayers or stabilizing Fannie and Freddie’s finances only makes matters worse. Director Watt’s decision to activate the Fannie and Freddie slush fund may be an early Christmas present for Acorn-like, liberal housing activists, but it’s a lump of coal in the stocking of every American taxpayer.” - See more at: http://www.realestaterama.com/2014/12/12/fhfa-director-delivers-lump-of-coal-to-every-taxpayer-ID025431.html#sthash.Xk1k5etX.dpuf
http://www.realestaterama.com/2014/12/12/fhfa-director-delivers-lump-of-coal-to-every-taxpayer-ID025431.html
The National Low Income Housing Coalition Applauds Decision to Direct Fannie and Freddie to Fund the National Housing Trust Fund December 12, 2014 by RealEstateRama Government and Public Real Estate News: Property News, Housing News, Grant News, Mortgage News, Foreclosure News WASHINGTON, D.C. – December 12, 2014 – (RealEstateRama) — The National Low Income Housing Coalition (NLIHC) commends the decision by Mel Watt, Director of the Federal Housing Finance Agency, to lift the suspension on Fannie Mae and Freddie Mac’s obligation to fund the National Housing Trust Fund (NHTF) and the Capital Magnet Fund. Finally, the National Housing Trust Fund will have resources to begin expanding the housing supply for the lowest income and most vulnerable people in our country, providing a major boost to efforts to end homelessness and housing poverty in the United States. “After eight years of advocacy to get the National Housing Trust Fund established and another six years to secure a sustainable funding source, we are thrilled that states will begin receiving critical new resources to expand the supply of rental housing for people with extremely low incomes,” said Sheila Crowley, President and CEO of NLIHC. “The decision by Mr. Watt that will result in the first funds for the National Housing Trust Fund is a great victory for the thousands of housing and homeless advocates who have worked tirelessly to establish the NHTF. More importantly, it is a victory for the people we strive to serve.” The NHTF was established in July 2008 as part of the Housing and Economic Recovery Act of 2008 (HERA). This law required that Fannie Mae and Freddie Mac pay 4.2 basis points of their annual volume of business to the two funds. The NHTF was to receive 65% and the remaining 35% was to go the Capital Magnet Fund (CMF). Unfortunately, the requirement that Fannie Mae and Freddie Mac contribute to the two funds was suspended when the companies were taken into conservatorship in September 2008 at the height of the housing crisis. With the lifting of the suspension now, the first funds are expected to be allocated in early 2016. The Trust Fund will provide block grants to the states, at least 90% of which must be used for the protection, preservation, rehabilitation, or operation of rental housing. No less than 75% of the funds for rental housing will benefit extremely low income households with the rest benefiting those with very low incomes. Up to 10% of Trust Fund resources may be used for homeownership activities for people with very low incomes. - See more at: http://www.realestaterama.com/2014/12/12/the-national-low-income-housing-coalition-applauds-decision-to-direct-fannie-and-freddie-to-fund-the-national-housing-trust-fund-ID025439.html#sthash.614o2BDK.dpuf
http://www.realestaterama.com/2014/12/12/the-national-low-income-housing-coalition-applauds-decision-to-direct-fannie-and-freddie-to-fund-the-national-housing-trust-fund-ID025439.html
Mortgage Rates Rise As Bonds Sell Off By Brent Nyitray, CFA, MBA Dec 12, 2014 9:41 am EST Every week, the Mortgage Bankers Association, or MBA, puts out an index of mortgage application activity
Mortgage applications are relevant to a number of industries—from banks to non-banks, to mortgage REITs including Annaly Capital Management, Inc.(NLY) and American Capital Agency Corporation (AGNC), to homebuilders such as KB Home (KBH), Lennar Corporation (LEN), and Toll Brothers, Inc. (TOL).
This series breaks down the different indices and helps you learn what insights you can glean from them. If you’re a bank, you’re looking at these indices and trying to determine whether you’re competitive in all the segments you want to be competitive in. If you’re a non-bank, you might be looking to see if you’re gaining share or losing share.
If you’re a mortgage REIT, you’re focusing on the refinance index and what it might mean for prepayments going forward. If you’re a homebuilder, you’re watching the purchase index as a way to gauge future demand.
Mortgage rates rise as bonds yields increase
The average 30-year fixed-rate mortgage rose 14 basis points, from 3.92% to 4.14%. The ten-year bond yield rose 15 basis points. Mortgage rates had spent most of the summer stuck around 4.25% and only recently acknowledged the strong bond market rally.
Mortgage banking has become a lot more competitive as rates have increased. The refinance business has fallen off a cliff, and bankers are cutting employees and rates. Mortgage originators are now taking more risk and doing loans they would have declined a year ago. This partially explains why mortgage rates overall aren’t moving despite the bond market rally. This is affecting REITs that have banking exposure, including PennyMac Mortgage Investment Trust (PMT), Nationstar Mortgage Holdings, Inc. (NSM), and Redwood Trust, Inc. (RWT). As well, Ocwen Financial Corporation (OCN) is facing regulatory scrutiny.
As rates have stabilized, they’ve helped even agency REITs with heavy leverage and duration exposure such as Annaly Capital and American Capital Agency.
http://marketrealist.com/2014/12/mortgage-rates-rise-bonds-sell-off/?source=google
Elizabeth Warren video. Dec. 10,2014. It is a slow news day.
ok you are right. I know my fannie is on the line. Yea I know that sounds like a personal problem.
possibly much more than that with the new info out if it is accurate. Today should be quite telling.
Do not forget about the 79.9% ownership through exercising the warrants. I think that there is a real possibility that these warrants are exercised and then sold on the open market. If that were to happen Uncle Sam could steal a lot more money from FnF.