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Thanks. The link is good and this does not flatter Lamberth. That whole article is educational. Good find. I wish that I could copy and paste but it is pdf and I am admittedly too computer illiterate to figure out how to do it. Does anybody else want to give it a shot?
Please post a link if you can.
thanks for doing that and I agree a mic for everyone speaking would help a lot.
At least make a real attempt at a factual arguement. FnF are very profitable. They are being ripped off. If you want to admit that their profits are being stolen you have a valid arguement. If they were not profitable the government would not be able to steal billions from them. As of the 30th of September Judge Lamberth was able ti rationilize ruling that the third amendment was legal because the government could get their loan plus interest any way that they want to. That was his cop out so that he could retire. Unfortunately for the treasury department as of the first of October because the next sweep takes more than the initial bailout and more than 10% interest, the treasury department is guilty of theft. That is why he had to rule by the 30th of September. So by his own ruling the federal government is violating the law as of October first because they have yet to end the net profit sweep(third amendment).
Oh you are bad luck. It just froze up for a long time. but it is back. I think the Feds are screwing with us. I will put a tin foil hat on my computer.
yea it freezes up quite a bit but comes back.
The webcast is very interesting.
Oh hell I didn't realize that you are Cramer. That explains a lot.
Foreclosure Inventory Plummets Year-Over-Year in August
Author: Brian Honea October 2, 2014
August saw a 32.8 percent decline in foreclosure inventory from August 2013, marking the 34th consecutive month with a year-over-year decrease, according to CoreLogic's August National Foreclosure Report released on Thursday.
According to CoreLogic, 1.6 percent of all residential mortgages, a total of approximately 629,000 homes, were in some phase of the foreclosure process in August. These numbers represent a significant downturn from the same month a year ago, when CoreLogic reported that 936,000 homes were in some stage of foreclosure, comprising 2.4 percent of all residential mortgages nationwide.
"Clearly there has been a large improvement in the market in the last few years, but five years into the economic expansion the foreclosure inventory remains at nearly three times the normal level," said Sam Khater, deputy chief economist at CoreLogic. "Since homeownership rates peaked in the second quarter of 2004, there have been seven million completed foreclosures, which account for 15 percent of all mortgages."
CoreLogic reported 45,000 completed foreclosures in August nationwide, down 22.2 percent from the 58,000 that were reported in August 2013. The report noted that prior to the decline of the housing market in 2007, completed foreclosures averaged 21,000 per month.
The rate at which mortgage loans were seriously delinquent (90 days or more past due or in some stage of foreclosure) was reported at 4.2 percent for August, according to CoreLogic. In all, 1,646 loans were seriously delinquent in August, a decline of 1.7 percent from July and 21.8 percent from August 2013.
Foreclosure inventory declined by 2.6 percent from July to August, according to CoreLogic. Completed foreclosures dropped by 1.1 percent month-over-month.
In August, the 12-month sum of completed foreclosures for the period ending in August 2014 was at 576,000, its lowest point since December 2007. Like foreclosure inventory, the 12-month sum of completed foreclosures has declined for 34 months in a row, according to CoreLogic.
https://dsnews.com/news/foreclosure/10-02-2014/foreclosure-inventory-plummets-year-year-august
Sorry about posting so much negative news. It is mostly regurgitation from yesterday but I just think that everyone should know what is out there.
Fannie & Freddie: Major Blow To Smart Money
October 2nd, 2014
lawsuitA DC Federal Judge dismissed investor lawsuits related to Fannie Mae (OTCBB:FNMA) and Freddie Mac (OTCBB:FMCC) profits.
CNBC’s Kate Kelly says the ruling is a major potential blow to smart money involved.
“Investors that have bet on the common or preferred equity have included Bill Ackman’s Pershing Square Capital Management LP, Perry Capital LLC, Paulson & Co. and Owl Creek Asset Management LP and units of private-equity firmsBlackstone Group LP (BX) and Carlyle Group LP. (CG),” Zachary Tracer Reports.
Tracer goes on to say, “The court delivered a “right hook” to investors’ hopes, said Jeffrey Lewis, a senior portfolio manager at hedge-fund manager TIG Advisors LLC, which has invested in the preferred shares. He wouldn’t say whether his firm owns them now.”
http://etfdailynews.com/2014/10/02/fannie-freddie-major-blow-to-smart-money/
Says the man that does not have to pay it.
JOIN WEBCAST OF “The Government’s Path Out of Conservatorship for Fannie Mae and Freddie Mac” HERE
http://investorsunite.org/join-webcast-governments-path-conservatorship-fannie-mae-freddie-mac/
Watch investors unite via internet here:
http://investorsunite.org/join-webcast-governments-path-conservatorship-fannie-mae-freddie-mac/
Live broadcast investors unite right now. Go to investors unite web site and just click on the arrow
As if I wasn't depressed enough. I guess the truth hurts.
looks like panic selling over. Vol down to 100 share blocks. Now it is manipulation. but we do have about 40 mil. volume
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) Outlook
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) closed down -0.205 at 1.495. Volume was 274% above average (trending) and Bollinger Bands were 217% wider than normal.
Open High Low Close Volume___
1.635 1.650 1.430 1.495 33,893,416
Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2.72 3.62 3.77
Volatility: 256 133 110
Volume: 30,057,706 10,379,802 16,130,496
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
FANNIE MAE is currently 60.3% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume out of FNMA.OB (bearish). Our trend forecasting oscillators are currently bearish on FNMA.OB and have had this outlook for the last 36 periods. Our momentum oscillator is currently indicating that FNMA.OB is currently in an oversold condition.
http://www.livetradingnews.com/federal-national-mortgage-assctn-fnni-otcbbfnma-outlook-74313.htm#.VC1kXbl0xqM
I just hope we found the bottom at $1.50
36 mil.
The NEW Affordability Crisis in Housing (House Prices And Apartment Rents Rising While Income Remains Stagnant)
The Federal Reserve’s zero interest rate policy and quantitative easing programs are contributing to rising home prices and apartment rents while not contributing to household income gains. The result is the “new” housing affordability crisis or as The Talking Heads sang “Burning Down The House” as in burning down housing affordability.
Bloomberg: The U.S. apartment-vacancy rate rose for the first time in almost five years, a sign that supply is starting to catch up to rental demand after a boom in multifamily construction.
The vacancy rate rose to 4.2 percent in the third quarter from 4.1 percent the previous three months, the first increase since the end of 2009, Reis Inc. (REIS) said in a report. Net leasing gains of 37,233 units lagged behind the 46,055 new units completed, the New York-based real estate research firm said.
Although the rise in the apartment vacancy rate is small (in the red circle), it may be a turning point if it repeats for several months. Notice that homeownership rate continues to fall as real median household income is making feeble increases.
apartvacrent
Then again, mortgage purchase applications remain in “Death Valley”, incomes are stagnant or rising slowly, but home prices and effective apartment rates are rising.
hpent
Is The Federal Reserve contributing to the this neo-affordability crisis with its flooding of capital markets with liquidity? It appears that the third round of quantitative easing (and The Fed;s zero interest rate policies) are associated with rapidly rising house prices and apartment rents, but NOT real median household income and mortgage purchase applications.
fedrents
The is the NEW affordability crisis where cheap money benefits investors who drive up asset prices (but not family income).
Is The Fed helping “Burn Down The House?” At least, burning down affordability.
http://confoundedinterest.wordpress.com/
Fannie And Freddie Shares Tumble Again After Legal Ruling
Investors continued to flee Fannie Mae and Freddie Mac on the second trading day following a legal ruling that made it seem less likely that anyone but the federal government would ever get their hands on the mortgage giants’ profits.
Shares of Fannie Mae fell by more than 11% in Monday morning trading to $1.51 and shares of Freddie Mac fell by 20% to $1.50. Shares of both the government-sponsored enterprises plunged on Wednesday by nearly 40%. Shares of Fannie Mae have now tumbled by 75% since spiking to their 52-week high of $6.35. Shares of Fannie Mae’s popularly trade Series S preferred shares fell by 15%.
Right after markets closed on Tuesday, U.S. District Judge Royce Lamberth threw out lawsuits filed by Richard Perry’s hedge fund and Bruce Berkowitz’s Fairholme Funds that claimed the government acted illegally by getting Fannie Mae and Freddie Mac to pay the government nearly all of its massive profits in the form of dividends.
Big hedge fund investors like Perry, together with retail investors, had made legal actions a key part of their campaign to score big on the securities of Fannie Mae and Freddie Mac. The Obama Administration wants to wind down the mortgage giants that have been operating in conservatorship since receiving $188 billion from the Treasury Department amid the financial crisis. Fannie and Freddie have paid the bailout out money back and are now hugely profitable.
English: The Colonial Revival headquarters of ...
English: The Colonial Revival headquarters of Fannie Mae, designed by architect Leon Chatelain, Jr. in 1956, located at 3900 Wisconsin Avenue, N.W., in the Cathedral Heights neighborhood of Washington, D.C. (Photo credit: Wikipedia)
Perry and Berkowitz bought Fannie and Freddie junior preferred securities a long time ago in the hopes that some of those profits would eventually flow to them. Other investors, including Berkowitz and, more recently, William Ackman’s Pershing Square Capital Management, took positions in the common shares of the GSEs. Ackman’s position was particularly big.
Judge Lamberth struck a huge blow to the legal argument championed by investors that the Treasury Department acted improperly by implementing a so-called sweep amendment in August 2012 in which all of the profits of the GSEs would go to the Treasury’s senior preferred stock. In essence, Judge Lamberth said that hedge fund and other investors in Fannie and Freddie securities could not get around the Housing and Economic Recovery Act that President George W. Bush signed into law that created the Federal Housing Finance Agency and gave it the authority to place Fannie Mae and Freddie Mac into conservatorship and regulate the GSEs.
“It strikes this court as odd that a statute like HERA, through which Congress grants immense discretionary power to the conservator, and prohibits courts from interfering with the exercise of such power, would still house an implicit end-run around FHFA’s conservatorship authority by means of the shareholder derivative suits that the statute explicitly bars,” Judge Lamberth wrote. “The plaintiff’s grievance is really with Congress itself.”
There are other legal cases pending against the government, including Ackman’s Pershing Square lawsuit. But clearly investors are taking a dimmer view of the potential for private investors to be successful in their effort to wrestle some of the GSEs’ profits away from the government.
http://www.forbes.com/sites/nathanvardi/2014/10/02/fannie-and-freddie-shares-tumble-again-after-legal-ruling/
Forging a Path out of Conservatorship for Fannie Mae and Freddie Mac by Dr. Clifford V. Rossi, Chesapeake Risk Advisors, LLC
Introduction
For three quarters of a century, the United States housing market thrived under a unique mortgage financing structure centered on the two government-sponsored enterprises (GSEs) Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC). It is ironic that out of the! ashes of the Great Depression Fannie Mae was created and during the financial crisis of 2008-2009, both GSEs were placed into conservatorship ostensibly as an emergency measure to staunch continued losses occurring at these agencies and importantly to stabilize the housing market and general economy that was teetering on the brink of collapse.
The mechanism that granted extraordinary powers to the US Department of Treasury and to the Federal Housing Finance Agency (FHFA), the regulator of Fannie and Freddie; namely the Housing and Economic Recovery Act of 2008 (HERA) has now 6 years after both GSEs entered conservatorship effectively left market in a form financial limbo. To a large degree, Congressional inaction over this period has effectively forestalled any serious plan for bringing one or both agencies out of conservatorship. The last significant legislative action on Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform was the Johnson-Crapo Senate proposal that could not muster sufficient votes to reach the floor of the Senate. The sheer complexity of GSE reform coupled with a nearly unprecedented schism between political parties explains why comprehensive GSE reform is for the time being elusive at best.
Meanwhile, the US housing finance system languishes in a form of suspended animation that poses considerable uncertainty to private investors and potential homebuyers alike. The right outcome for Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform as explained above is unlikely to occur, however, a solution that would bring private capital back to housing markets, significantly limit but not eliminate taxpayer contingent liability, and address the issues that precipitated the demise of the GSEs is feasible. This solution is already possible within the HERA legislation by granting the FHFA authority to bring the housing GSEs out of conservatorship. This paper presents a roadmap for this solution to GSE reform by outlining the statutory language affording FHFA the powers to unwind the conservatorships, the rationale for such a move, an examination of the causes for GSE conservatorship that have or can be addressed independent from Congressional action and a review of the steps needed to bring the agencies out of conservatorship. The paper provides support not only for why recapitalizing the GSEs makes sense from a public policy perspective, but how it could be done as well as the prerequisites for such action.
http://www.valuewalk.com/2014/10/forging-path-conservatorship-fannie-mae-freddie-mac/
Carney: Don't buy the dip in Frannie
I hate this jackass Oct 2 2014, 09:59 ET | By: Stephen Alpher, SA News Editor
The 52-page ruling from U.S. District Judge Royce Lamberth "meticulously demolishes" every argument made by investors claiming Treasury and the FHFA acted illegally when altering Fannie Mae's (OTCQB:FNMA -10%) and Freddie Mac's (OTCQB:FMCC -7.3%) bailout agreement in 2012.
The new agreement, says Lamberth, is clearly within the bounds of authority Congress granted in 2008 when passing a law overhauling oversight of the GSEs.
Yes, Lamberth's ruling doesn't directly affect the dozens of other pending lawsuits, but now plaintiff's attorneys will have to start out explaining how Lamberth got things wrong.
http://seekingalpha.com/news/2012205-carney-dont-buy-the-dip-in-frannie
Carney: Don't buy the dip in Frannie
I hate this jackass
Oct 2 2014, 09:59 ET | By: Stephen Alpher, SA News Editor
The 52-page ruling from U.S. District Judge Royce Lamberth "meticulously demolishes" every argument made by investors claiming Treasury and the FHFA acted illegally when altering Fannie Mae's (OTCQB:FNMA -10%) and Freddie Mac's (OTCQB:FMCC -7.3%) bailout agreement in 2012.
The new agreement, says Lamberth, is clearly within the bounds of authority Congress granted in 2008 when passing a law overhauling oversight of the GSEs.
Yes, Lamberth's ruling doesn't directly affect the dozens of other pending lawsuits, but now plaintiff's attorneys will have to start out explaining how Lamberth got things wrong.
http://seekingalpha.com/news/2012205-carney-dont-buy-the-dip-in-frannie
Fannie Mae: What To Do After Yesterday's Massacre
Oct. 2, 2014 9:21 AM ET | 10 comments | About: Fannie Mae (FNMA), FMCC
Disclosure: The author is long FNMA. (More...)
Summary
•A U.S. judge has thrown out two Fannie Mae/Freddie Mac lawsuits and dealt investors a blow.
•Shares of Fannie Mae and Freddie Mac collapsed as a result.
•Is it still worth it clinging to the long investment thesis after this week's court ruling?
What a day yesterday. Shares of government-sponsored entities Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) got slaughtered in yesterday's trading session after a U.S. court dealt a massive blow to investors who were banking on the U.S. justice system to throw out the 'net sweep agreement'. The sweep agreement in question basically stipulates that both Fannie Mae and Freddie Mac have to fork over all (future) earnings indefinitely, while at the same time dividends won't be applied against Fannie Mae's and Freddie Mac's debt balance at Uncle Sam.
Some shareholders like Perry Capital or Bruce Berkowitz's Fairholme Capital Management brought suits against the government questioning the legality of the net sweep arrangement. Though many high-profile investors like Bill Ackman from Pershing Square Capital Management and Carl Icahn of Icahn Enterprises have jumped on board -- which lend even more credibility to the GSE investment thesis --, a common stock position in either Fannie Mae and Freddie Mac was of high risk nonetheless.
As has previously been noted by me as well as other contributors on Seeking Alpha, the investment thesis in Fannie Mae and Freddie Mac was pretty much characterized by a binary event: Either a judge would strike down the net sweep agreement, or uphold it. In either case, significant upside and downside volatility would ensue. And investors certainly got a taste of it yesterday.
Bloomberg reported yesterday on the uppercut delivered to Fannie Mae and Freddie Mac investors:
“
Fannie Mae and Freddie Mac plunged in New York trading after investors including Bruce Berkowitz's Fairholme Capital Management LLC lost a legal bid yesterday to force the bailed-out companies to share profits with private shareholders.
The investors sued for breach of contract over allegedly promised dividends and liquidation preferences, and what they called an illegal "taking" under the U.S. Constitution. U.S. District Judge Royce Lamberth rejected their claims, finding that the government is allowed under a 2012 amendment to the companies' bailout agreements to sweep "nearly all" profits from Fannie Mae and Freddie Mac to the U.S. Treasury.
Investors have claimed they've been unfairly barred from participating in post-bailout profits earned by Washington-based Fannie Mae and Freddie Mac. At least $33 billion -- the face value of potentially worthless preferred shares in the companies -- is at stake in the cases, as well as shareholders' efforts to win congressional support for the idea of reviving Fannie Mae and McLean, Virginia-based Freddie Mac.
Hedge-fund manager Bill Ackman's Pershing Square Capital Management LP filed a separate suit in August in the U.S. Court of Federal Claims in Washington, claiming the government's diversion of profits violates the Constitution's Fifth Amendment, which prohibits the taking of private property for public use without just compensation. Fairholme also has a case in that court that is now in pretrial exchange of information.
"Although litigation is a lengthy process, shareholder-owned Fannie Mae and Freddie Mac remain vitally important and increasingly valuable to all constituents," Berkowitz's firm said in a statement through Sard Verbinnen & Co. "On behalf of hundreds of thousands of Fairholme Funds shareholders, we will vigorously pursue the enforcement of existing contractual claims and our inalienable rights of property ownership as guaranteed by the U.S. Constitution."
The court ruling certainly is a massive blow for shareholders in the government-sponsored enterprises. However, other courts are still involved in the lawsuit, and especially the big guys are going to fight the court's ruling and make their way through the justice system as far and as aggressive as they possibly can: Just too much money is at stake.
However, one has to admit: The odds have clearly worsened with respect to a successful shareholder lawsuit, and the judge's adverse court ruling rightly affected the share price of the two companies.
Chart picture
As you can easily imagine, investors completely lost it yesterday and panicked after news about the court ruling made the headlines: Fannie Mae lost 37% in yesterday's trading session, and shares of sister company Freddie Mac declined 29%.
Both Fannie Mae and Freddie Mac now trade at levels not seen since the end of October 2013.
Freddie Mac's share chart similarly depicts a yawning gap as a result of yesterday's extreme volatility.
(click to enlarge)
Source: StockCharts.com
Bottom line
There is no denying here: The long investment thesis has been dealt a serious blow by this week's court ruling against Fannie Mae and Freddie Mac shareholders. Throwing out the lawsuits that intended to stop the fund flows into the coffers of the Treasury on the basis of the net sweep agreement, also had a massive psychological impact on investors -- as the share charts above highlight.
From a technical perspective, there might be a long trading opportunity emerging after both share charts depict two yawning gaps. From an investing perspective, I believe the odds have turned against shareholders, and I would advise against an investment in Fannie Mae's or Freddie Mac's common shares after yesterday's brutal sell-off. Avoid.
Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks
http://seekingalpha.com/article/2536245-fannie-mae-what-to-do-after-yesterdays-massacre
(click to enlarge)
30 mil.
27 mil
25 mil.
I just got some more at $1.52
21 mil in 28 minutes
I hope big boys get their fill soon. 18 mil so far
15mil in volume already.
Somebody probably has a video of Lamberth in an unnatural sex act. So he took a payoff and will retire to an island.
Maybe he will retire to the Cayman Islands to be close to his new payoff.
I believe that the amount swiped by treasury includes principal and over 10% interest. Government has been paid in full and then some.
Maybe Rocco's post can help you. post# 251039
Is There Any Hope For Fannie Mae And Freddie Mac Investors?
After the catastrophic court ruling for investors in Fannie Mae and Freddie Mac, Bidness Etc explains why there is still hope
Published: October 2, 2014 at 8:00 am EST
By: Troy Kuhn
Giants of the mortgage finance domain, Fannie Mae (FNMA) and Freddie Mac (FMCC) saw their stocks nosedive yesterday in the wake of the District court ruling that dismissed investors’ claims of unfair treatment.
Four lawsuits filed against the federal government were thrown out by Judge Royce Lamberth on Tuesday, citing the Housing and Economic Recovery Act. The dismissed lawsuits included those filed by investors Fairholme Funds Inc. and Perry Capital LLC last year.
In 2013, both Fannie Mae and Freddie Mac climbed over 1000% on speculation that investors will be given a fair share in profits. The District court ruling, however, disappointed investors, who are left with $33 billion worth (face value) of preferred shares, which are possibly valueless now.
Common stocks of the two companies were down over 60% in yesterday’s pre-market trading. Fannie Mae closed at $1.70, slipping 36.8% for the day while Freddie Mac fell 37.5% to close at $1.65. The former’s preferred shares – series “S” – plunged 55% yesterday to $4.15. Similarly, Freddie Mac’s “Z” series preferred shares tanked 58% in the regular trading hours and a further 25% in the afterhours, settling at $3.25.
The court verdict has resulted in a massive financial setback for investors in the two government-sponsored enterprises. Many investors might have sold their holdings while some might be looking to. But others hold a different point of view.
As Fannie Mae and Freddie Mac came tumbling down, many investors, including hedge-fund Maglan Capital, decided to hold on. When the stocks were down 60%, the fund’s President David Tawli said, "At 50 cents a share, I'm not going to throw in the towel."
Others who have decided to hold are banking their hopes on the fifteen lawsuits that remain. Richard Epstein, from NYU School of Law, believes Judge Lamberth has made a “massive injustice”.
Professor Epstein, reviving hope for investors, wrote, “Fortunately, Judge Lamberth does not represent the only game in town. Concurrently, litigation is also taking place in the Court of Federal Claims before Judge Margaret Sweeney, who has prudently refused to grant the government a summary judgment and has ordered discovery to take place on all the issues that are relevant to any proper resolution of this dispute.”
He believes the recent ruling was just “one battle in a long war.” Judge Margaret Sweeney is presiding over some litigations as well, and from what Mr. Epstein says, she is determined to get to the bottom of the situation. She has requested data like Fannie and Freddie’s profitability at the time of the dividend sweep.
Her investigation into the matter makes Judge Lamberth’s instant ruling look like a big injustice. This must surely be some sigh of relief for Fannie Mae and Freddie Mac investors. Bill Ackman’s hedge-fund, Pershing Square Capital Management, is also awaiting its trial.
http://www.bidnessetc.com/26641-is-there-any-hope-for-fannie-mae-and-freddie-mac-investors/