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Does wiping out the shareholders conserve and preserve the GSEs?
Would private capital invest in GSEs after they wipe out the prior shareholders?
You can’t call for a capital raise of some sort and then also say but first we need to wipe out shareholders. I think it’s just lip service so that they can appear to address all ideas all the while the plan has already been set in motion. Trump wants this done before the election.
Ridiculous comment by MC.
Technical Event
Outlook - Fannie Mae ST: as long as 3 is support look for 5.13
Short Term View: Limited Rise
RiseLimited RiseConLimited DeclineDecline
Recent Technical Change
Upgrade
Medium Term View: Bullish
BullishRangeBearish
Recent Technical Change
Unchanged
Our pivot point is at 3.
Our preference: as long as 3 is support look for 5.13.
Alternative scenario: the downside breakout of 3 would call for 2.23 and 1.77.
Comment: the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading under its 20 day MA (3.75) but above its 50 day MA (3.09).
Supports and resistances:
6.07 **
5.6 *
5.13 **
4.65
3.63 (USD-last)
3.31
3 **
2.23 *
1.77 **
Head of Research at TRADING CENTRAL: Rémy GAUSSENS
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Written on 10-10-2019 at 18:55 UTC+1
Price reference: 3.63 last known on 10-10-2019 at 18:55 UTC+1
Investment horizon: ST
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Learn more about Technical Support and Resistance Levels
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Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Growth stocks can be more volatile than other types of stocks. Value stocks can continue to be undervalued by the market for long periods of time. Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which are magnified in emerging markets. Illiquidity is an inherent risk associated with investing in real estate and REITs. There is no guarantee the issuer of a REIT will maintain the secondary market for its shares and redemptions may be at a price which is more or less than the original price paid. Closed-end funds can trade at a discount to their NAV. Shareholders of Master Limited Partnerships may be treated as partners for tax purposes. Partnerships issue a Schedule K-1 (Form 1065) rather than a Form 1099 form for tax purposes. It lists the partner's share of income, deductions, credits, etc. Speak with your tax advisor to determine how this may affect you. A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. Royalty trusts may have special tax treatment, so you should consult a tax advisor on the potential tax consequences of investing in them.
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462499.6.0
Well hell...
Hers the link.
Read the lyrics first ... Good Tune
https://m.youtube.com/watch?v=[yt]U6Y9UDOWgzw[ /yt]
All these years, Arkansas
Teachin' at the high school
How was I to know by retirement day
II'd learn a lesson so cruel?
I came to the day I had waited on
Just to find out all the money in our pension was gone
We invested in somethin' called the Abacus Bond
Sold to us by a New York banker
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
A big time banker from New York City
Came down south one day
Sold our people on the bond, had our money bettin' on
Some kinda home loans getting' paid
Buy in they say, we were clearly told
This kinda thing was even safer than gold
But later on we found out the bond we'd been sold
Had been set up to fail all along
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
We'd been set up to fail all along
Though none of our people had ever quite sensed it
Come to find out the bond born to fail'd been built
So that banker could bet his bread against it
When the house market crashed our retirement did too
Everybody said there was nothing we could do
That banker walked off with a million or two
I'm still teachin' at the high school
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
Good things happen to bad people, bad people, bad people
Proud of you buddy
They can be uplisted while in conservatorship. DeMarco delisted... Calabria can relist.... see previous post
Spicoli Tuesday, 03/12/19 01:29:40 PM
Re: kthomp19 post# 511515 0
Post #
511535
of 561061
FHFA (demarco) was in control and made the decision to delist.
Same FHFA (Otting) could re-list.
https://www.reuters.com/article/us-housing-fanniefreddie-delisting/fannie-mae-freddie-mac-to-delist-shares-on-nyse-idUSTRE65F3GR20100616
“The regulator, the Federal Housing Finance Agency, directed the companies to delist common and preferred stock from the NYSE and any other national securities exchange.”
FWIW
Long-overdue! Politicians should not be allowed to give taxpayer money to homebuilders, homebuyers, and speculators. Housing decisions should be made by private citizens, the way they are in Canada. https://t.co/7c8qJ606ch
— John Stossel (@JohnStossel) September 8, 2019
How can they... both parties involved now say to follow the law. But yup they probably will.
Hey Board Realist !!! Thoughts ??
Best next step is to RELIST !!!
Thanks Mr. Obvious !! ;)
WOW how convenient !!! Treasury’s plan says to follow the law. Calabria wrote that HERA was violated!! En Banc ... The law has been broken !!!
Any reporter who quotes Jim Parrott should now recognize that he and his “fellow travelers” have been found, by the Fifth Circuit to have violated the #Constitution by implementing the third amendment to the #PSPA.
— joshua rosner (@JoshRosner) September 6, 2019
Trump's ambitious Fannie, Freddie overhaul faces hurdles
Pete Schroeder
https://www.reuters.com/article/us-fannie-freddie-hurdles/trumps-ambitious-fannie-freddie-overhaul-faces-hurdles-idUSKCN1UL1TR
WASHINGTON, July 26 (Reuters) - President Donald Trump's administration faces a growing list of hurdles that could scuttle its ambitions to remove U.S. mortgage giants Fannie Mae and Freddie Mac from their government lifeline.
Fannie and Freddie have been in conservatorship since they were bailed out during the 2008 financial crisis. In March, the administration said it was devising a plan to put them back on their feet, raising market hopes that the pair might seek a jumbo initial public offering as early as next year.
But as the Federal Housing Finance Agency (FHFA) and the U.S. Treasury begin to dig into the details, reality is starting to bite. From securing a federal guarantee to extricating the Treasury from its holdings, there is too much to do before the 2020 presidential election, analysts and housing experts said.
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The U.S. Treasury Department is already stretched by the trade war with China and sanctions issues, they noted.
Mark Calabria, director of the FHFA which controls Fannie and Freddie, told Reuters last week he hoped the pair would be ready to exit conservatorship within five years, offering the clearest signal yet a speedy overhaul is unlikely.
"You're trying to reform what is the financing behind one-sixth of the economy," said Pete Mills, senior vice president at the Mortgage Bankers Association. "You've got to do it in a way that doesn't disrupt the marketplace, and that's the challenge."
One key emerging question is whether the government would stand behind Fannie and Freddie once it stops running them. Although Calabria can remove the pair from conservatorship without a guarantee, doing so would likely push up the price of their securities and, in turn, mortgage costs for homeowners.
Calabria told Reuters he does not want to disrupt the housing market but hoped that by taking the first steps towards reforming Fannie and Freddie he will spur Congress to create an explicit guarantee for the pair's securities.
However, several congressional sources and lobbyists said key committees had made little progress on housing finance reform and lawmakers are unlikely to agree a guarantee before the end of 2020.
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A Treasury spokesman declined to comment. White House spokesman Judd Deere said in a statement it was "long past time for the United States to reform its housing finance system."
CHARTING A COURSE
FHFA and Treasury also have to agree on a plan for raising at least $100 billion of fresh capital for the firms.
Treasury holds warrants representing 80% of Fannie and Freddie's common stock, as well as senior preferred stock. Under the current terms of the preferred stock agreement, Treasury is guaranteed a 10% dividend and sweeps the firms' quarterly net profits into its coffers. That arrangement has left Fannie and Freddie with just around $3 billion of capital each.
The industry expected Calabria to begin rebuilding the pair's capital by ending the profit sweep and retaining their earnings, but last week he told Reuters he wanted to make that change "holistically" as part of a broader renegotiation of the preferred stock agreement terms.
In addition to ending the profit sweep, those talks would have to remove restrictions on the mortgage giants raising fresh capital and address what, if any, dividend Treasury would receive. FHFA and Treasury would also likely have to agree with the Federal Reserve on the terms of a line of government credit.
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"What's fair for the taxpayers' investment, but what's sustainable for a path out?" said Calabria, describing the dilemma.
Only once those terms are agreed can Treasury chart a course for selling its holdings, which could prove a lengthy process. It took the government several offerings spread over 19 months to unload its stock in insurer American International Group, for example.
A potential Fannie and Freddie IPO will require the firms to clean up their business lines, accounting and corporate governance, Calabria said. He added that the firms also have "supervisory deficiencies" to fix, without elaborating.
In the meantime, regulators have to finish a capital rule for Fannie and Freddie and decide how they would rework rules defining high-quality mortgages.]
"There are a series of very important questions that need answers before investors would be willing to dedicate private capital to these entities," said Ed Mills, a Washington policy analyst with Raymond James. (Reporting by Pete Schroeder Additional reporting by Jeff Mason and Richard Leong Editing by Michelle Price and Paul Simao)
Our standards: The Thomson Reuters Trust Principles.
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RELIST to a big board if they are going to issue stock. No brainer.
BIZARRE !!! Beat Box Timmy?! HA!
I use Fidelity active trader pro to watch trades.
15,0000 $2.75 @ 16:00:29
50,0000 $2.725 @ 16:00:32
50,0000 $2.70 @ NLTrade.
Never seen NLTrade ... anyone know what it may stand for?
The Treasury plan to reform FanFred is at the White House, has been for weeks. Will it see the light of day? Yes. but who gets to see it first? And will it be set in motion? https://t.co/DVFW5ceK9v
— Paul Muolo (@PaulMuolo) July 15, 2019
SCOOP: @USTreasury unlikely to advocate privatization as a viable option in @FannieMae @FreddieMac reform-sources; Treasury complaining lack of personnel w GSE skills slowing reform, timetable uncertain-sources more 345pm @FoxBusiness @LizClaman $FNMA $FMCC
— Charles Gasparino (@CGasparino) July 15, 2019
Short Takes: The First Step in GSE Reform: New Capital Standards from the FHFA / How to Liquidate and Sell the Charters (Legally) / Guaranteed Rate Comes on Strong / The Race to the Top of the Mortgage Heap / Das? / Two Big Hires for SitusAMC
pmuolo@imfpubs.com, bivey@imfpubs.com
If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…
The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…
Top 15-ranked lender Guaranteed Rate broke company records for mortgage-lock volume for four consecutive months, including June. The lender said it locked $5.31 billion of volume for the month that just ended…
Meanwhile, United Wholesale Mortgage continues to originate loans hand-over-fist but can it catch up to market leaders Quicken Loans and Wells Fargo? We’ll put it this way: The race is getting much closer as the quarters go on…
Wells Fargo continues to hunt for a new CEO to run the entire banking organization. We’re told one candidate still in the running for the job is Sanjiv Das, CEO of Caliber Home Loans, the nation’s 11th largest home lender. During his career, Das has worked at Citibank, Vericrest Financial and other shops.
MORTGAGE PEOPLE: SitusAMC (formerly Situs) said Tim Mazzetti and Dean Wheeler will be joining the mega-advisory firm as managing directors. In their roles, Mazzetti and Wheeler will lead the firm’s U.S. servicing and asset management business. The two men join SitusAMC from Cohen Financial. The firm has roughly $175 billion in commercial real estate assets under management globally.
Almost Half of All New Home Loans Are Taken Out by Millennials
Millennials now account for 47% of all new mortgage originations, according to Realtor.com. But this generation doesn’t approach the loan process in the same way as previous borrowers, so grabbing their attention — and business — may require you to shake up your selling tactics a bit. Examine the outlook for the millennial mortgage market, and gather some key tips for capturing market share within it, in the Inside Mortgage Finance guide Mortgages for Millennials.
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FNMA Equity Summary Score: Bullish (8.3) Provided by StarMine from Refinitiv AS OF 07/02/2019
The Equity Summary Score is an accuracy-weighted sentiment derived from the ratings of independent research providers on Fidelity.com. It uses the past relative accuracy of the providers in determining the emphasis placed on any individual opinion. Learn More....
FNMA Equity Summary Score Firms (i) Independent Firm
Firm Refinitiv
StarMine
Relative
Accuracy Standardized
Opinion
Columbine Capital Services Inc. (i) N/A Neutral
McLean Capital Management (i) N/A Neutral
Trading Central (i) N/A Buy
ValuEngine (i) N/A Outperform
Zacks Investment Research, Inc (i) N/A Neutral
Opinion used in Equity Summary Score
FNMA Equity Summary Score
5 Firms†| Methodology
FNMA Equity Summary Score Performance / History
Company Research Highlights® Report (PDF)*
*Generated reports are built dynamically when you select them. Reports may not be available for some symbols. Select the link to check availability for this symbol.
All Opinions Provided by Investars AS OF 07/03/2019 (i) Independent Firm
STANDARDIZED OPINION
Firm / Aggregate Opinion
Click name for performance
Opinion 1 Year History
Click line for details
Investars Smartindex Date Opinion Latest Report
Columbine Capital Services Inc. (i) Neutral
8.66% 06/30/19 2 06/29/19
FBR Neutral
12.31% 04/05/19 Market Perform N/A
McLean Capital Management (i) Neutral
40.85% 06/30/19 Neutral 06/22/19
Trading Central (i) Buy
11.54% 06/30/19 Buy 07/02/19
ValuEngine (i) Outperform
10.95% 07/02/19 Buy 07/03/19
Zacks Investment Research, Inc (i) Neutral
11.41% 06/30/19 Hold N/A
Equity Summary Score
5 Firms† | Methodology
N/A
N/A 07/02/19 Bullish N/A
I/B/E/S Estimates from Refinitiv
3 Analysts | Methodology
N/A
N/A 06/20/19 Hold N/A
Opinion used in Equity Summary Score
Research Firm Scorecard
Independent research that tabulates and analyzes the performance data of stock recommendations made by the research firms available on Fidelity.com.
Explore Research Firms
Learn about the methodology and approach of the research firms offered on Fidelity.com.
† The Equity Summary Score provided by Thomson Reuters StarMine is current as of the date specified. There may be differences between the Equity Summary Score analyst count and the number of underlying analysts listed. Due to the timing in receiving ratings changes into the Equity Summary Score model, the Equity Summary Score analyst count may lag the ratings count displayed by one or more days. There may also be analyst count variations for symbols with multiple share classes and ADRs. More details on Equity Summary Score calculation are included in the Understanding and Using the Equity Summary Score Methodology (PDF).
As with all your investments through Fidelity, you must make your own determination whether an investment is appropriate for you. Fidelity is not recommending or endorsing this security by making it available to customers. You should conduct research and perform a thorough investigation as to the characteristics of any securities you intend to purchase. Before investing, you should read the prospectus, offering circular, indenture, or similar document carefully for a full description of the product, including its features and risks, to determine whether it is an appropriate investment for your investment objectives, risk tolerance, financial situation and other individual factors, and be sure to re-evaluate those factors on a periodic basis.
Performance data shown represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore, you may have a gain or loss when you sell your shares.
Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Growth stocks can be more volatile than other types of stocks. Value stocks can continue to be undervalued by the market for long periods of time. Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which are magnified in emerging markets. Illiquidity is an inherent risk associated with investing in real estate and REITs. There is no guarantee the issuer of a REIT will maintain the secondary market for its shares and redemptions may be at a price which is more or less than the original price paid. Closed-end funds can trade at a discount to their NAV. Shareholders of Master Limited Partnerships may be treated as partners for tax purposes. Partnerships issue a Schedule K-1 (Form 1065) rather than a Form 1099 form for tax purposes. It lists the partner's share of income, deductions, credits, etc. Speak with your tax advisor to determine how this may affect you. A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. Royalty trusts may have special tax treatment, so you should consult a tax advisor on the potential tax consequences of investing in them.
Any data, charts and other information provided on this page are intended for research purposes to help self-directed investors evaluate many types of securities including, but not limited to common stocks, American Depository Receipts, Master Limited Partnerships, real estate investment trusts. traditional preferred stock, trust preferred securities, third-party trust certificates, convertible securities, mandatory convertible securities and other exchange-traded equity and/or debt securities. Criteria and inputs entered, including the choice to make security comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from its use.
577078.7.0
Breaking News
— Charles V Payne (@cvpayne) June 25, 2019
Major moves at the White House toward real solutions for affordable housing.
The creation of White House Council on Eliminating Regulatory Barriers to Affordable Housing: Special Guest Sec Ben Carson.
Tune in 2PM @SecretaryCarson@FoxBusiness
https://www.bloomberg.com/opinion/articles/2019-06-25/low-mortgage-rates-are-no-big-help-for-housing
Economics
Mortgage Rates Tumble and This Is All We Get?
If this is the best housing can do under such supportive conditions, we should start worrying.
By Robert Burgess
June 25, 2019, 12:00 PM EDT
Is anyone watching the housing market?
Is anyone watching the housing market? Photographer: Ty Wright/Bloomberg
At his press conference following the Federal Reserve’s monetary policy meeting last week, Chair Jerome Powell spent the bulk of his time talking trade wars and risks to the global economic outlook. What didn’t get any attention was the state of the all-important housing market. Too bad.
Data out on Tuesday paint a picture of a housing market under pressure. That would be concerning under most circumstances, but it’s particularly worrisome now, given the tremendous drop in borrowing costs over the past six months and the lowest unemployment rates in half a century – ingredients that should be supportive for the market.
Let’s take a look at the numbers. First, the S&P CoreLogic Case-Shiller National Home Price index increased just 2.54% in April from a year earlier, marking the 13th straight month during which gains have slowed. This time last year, home prices were rising at a 6.30% clip. On a monthly basis, prices were unchanged, compared with forecasts for a 0.1% increase. Next, the U.S. government said sales of new single-family homes dropped 7.8% in May to a 626,000 annualized pace that missed all estimates in Bloomberg's survey of economists. The median sales price decreased 2.7% from a year earlier to $308,000, marking the sixth time in the past seven months that prices have dropped and a sign that buyers are balking at elevated property values.
Housing Underwhelms
If this is the best the housing market can muster – even after the average rate on a 30-year fixed-mortgage as measured by Freddie Mac dropped to 3.84% from last year’s peak of almost 5% in November – then it’s time to question the health of consumers. The latest consumer confidence numbers support the notion that Americans are feeling less secure. The Conference Board’s index of sentiment for June, released Tuesday, dropped to the lowest level since September 2017 as consumers became less upbeat about the economy. At 121.5, down from a revised 131.3 in May, the index came in lower than all forecasts in a Bloomberg News survey of economists.
Residential real estate has been a drag on economic growth for five straight quarters, according to data from the Bureau of Economic Analysis. The last time that happened? It was during the financial crisis of 2008-2009. Now, no one is saying a housing bust is looming. Builder Lennar Corp. said Tuesday that new orders for its homes exceeded analysts’ estimates in the first quarter. And data last week showed sales of existing homes, which make up the majority of the market, topped estimates in May as all four regions of the U.S. gained.
Even so, there are clear signs that the housing market is slowing, which is a concern given how much wealth average Americans have tied up in their homes. If consumers are noticing their homes are no longer appreciating in value, then that could put a damper on what is already tepid spending levels. After all, consumer spending accounts for about two-thirds of the economy. Indeed, the Fed’s quarterly Flow of Funds report released earlier this month showed that consumer debt growth slowed to a 2.3% annual pace in the first quarter, the least since 2015, from a 2.8% rate in the fourth quarter. Again, no crisis, but something to watch.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Robert Burgess at bburgess@bloomberg.net
To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net
Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.
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WASHINGTON -- Mark Calabria has a message for Congress: Help the Trump administration overhaul mortgage-finance companies Fannie Mae(FNMA) and Freddie Mac(FMCC), or he will do what he can on his own.
The two companies, critical to half the nation's mortgages, have been under government control since the 2008 financial crisis. For over a decade, policy makers have tried and failed to return them to the private sector and scale back the government's role in housing.
"If I do nothing and don't push, then I'm fairly certain Congress will do nothing," said Mr. Calabria, the Trump- appointed head of the Federal Housing Finance Agency, which oversees Fannie and Freddie. "They have a lot of priorities, so how do I knock this up a few levels in the priority chain for Congress?"
Mr. Calabria is expected to send ideas to Congress as early as this week, people familiar with the matter said.
He acknowledged that mortgages could become more expensive if the Trump administration returns Fannie and Freddie to private hands without a broader legislative solution -- a reason Congress ought to act, he said.
"If all of these things are the likely outcome, then that should focus Congress to come in and decide what it wants the future to be," Mr. Calabria said, when asked whether the firms could see ratings downgrades that could ultimately raise mortgage costs.
Fannie and Freddie for decades have played a key role in maintaining the plumbing of the U.S. mortgage market. They purchase loans from lenders and repackage them as securities that are insured if the loans default, guaranteeing roughly half of the $10 trillion housing market. The companies also are central to the popular 30-year mortgage, which locks in low payments for buyers.
The companies got into trouble ahead of the financial crisis because they took on more risk without building more of a financial cushion to cover possible losses. Fannie and Freddie amassed huge investment portfolios to profit from the difference between their lower cost of funding mortgages -- a benefit of an implied federal guarantee because Congress created the firms -- and the rates they could earn on mortgages. They were bailed out after loans went sour during the housing market's free fall; the George W. Bush administration put them in government conservatorship, where they remain today.
Repeated efforts to overhaul Fannie, Freddie and the housing-finance system have foundered since the crisis because of disagreement over how to do it -- and because the mortgage market has stabilized with lower interest rates. Boosting the companies' financial footing also would be expensive -- possibly more than $125 billion -- because the companies need more capital to absorb losses, if housing hits a rough patch.
The Obama administration in 2011 released plans that didn't gain traction in Congress. A subsequent legislative effort in 2014 and another during the Trump administration also fell flat.
Lawmakers in both parties this year have said the issue is a priority, but so far they have yet to agree to any legislation to overhaul the companies.
Mr. Calabria expressed frustration that policy makers didn't end the Fannie and Freddie conservatorship years ago and compared his push to re-privatize the companies to President Trump's willingness to confront China on its trade policies. "These aren't issues that are new. The problems are old. I think the issue is you have somebody who is finally saying that 'my responsibility is not to hang out for five years.'"
Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee, said prior legislative efforts sputtered because of what he called complicated "Rube Goldberg" machinations. "I want to see a solution here, " he said in an interview.
Getting to an agreement will prove easier said than done. Some conservative Republicans have generally called for a private market with limited or no new federal guarantees. Other Republicans and many Democrats say a federal role is needed to preserve liquid markets for the 30-year fixed-rate mortgage that is popular with home purchasers.
A libertarian economist and former aide to Vice President Mike Pence, Mr. Calabria wants to put the firms, now profitable, on the road toward private ownership and increase competition in housing finance by fully overhauling the system. Doing so, however, will be up to Congress, he stressed.
To create a more stable housing finance-system long-term, Mr. Calabria's proposals would call for lawmakers to establish an explicit federal guarantee for securities sold by the companies.
He also plans to urge lawmakers to make technical changes to the FHFA's authority to put it on a level playing field with other regulators, he said. Those would include allowing the FHFA to charter new competitors for the firms, the way bank regulators are authorized to charter new banks.
Congress has incentives to act before Mr. Calabria moves to end the conservatorship on his own. Privatizing the companies administratively -- without help from lawmakers -- could upset Republicans uncomfortable with returning the firms to how they operated before the crisis. Democrats also worry that privatizing the firms could be done in a way that reduces the firms' footprints in housing and increases borrowing costs, particularly for lower- and middle-income borrowers.
Only Congress can create an explicit guarantee from the government for securities issued by Fannie, Freddie and other new competitors, reducing the chance of instability in housing markets. The exact market ramifications of recapitalizing and releasing the companies without Congress depend on how, precisely, the administration moves ahead with a "recap and release" plan for the companies, housing experts said.
Mr. Calabria said his proposals would be consistent with a separate overhaul blueprint that the Treasury Department is crafting. That plan also is likely to include legislative proposals along with administrative steps the companies' regulator can take, if Congress doesn't enact a more fundamental overhaul.
Both plans take into account the likelihood that Congress won't take action, Mr. Calabria said. "A lot of what you're going to see out of Treasury and a lot of what you're going to see here is, how do we continue to make administrative actions that aren't dependent on Congress," he said.
Write to Andrew Ackerman at andrew.ackerman@wsj.com
(END) Dow Jones Newswires
06-12-190700ET
Copyright (c) 2019 Dow Jones & Company, Inc.
Politics. En Banc could change everything.
Why do all my Relist first step posts get deleted. Commander ?
Prepared Remarks of MBA President and CEO Bob Broeksmit, CMB, at the 2019 MBA National Secondary Market Conference & Expo
May 20, 2019
CONTACT
Rob Van Raaphorst
rvanraaphorst@mba.org
(202) 557-2799
NEW YORK (May 20, 2019) - Bob Broeksmit, CMB, MBA President and CEO, delivered the following remarks here at MBA's 2019 National Secondary Market Conference & Expo.
[Please Note: These are prepared remarks. Mr. Broeksmit may add to or subtract from these remarks during the course of his presentation. Portions of the text may be omitted during the speech.]
It's great to be here with so many leaders in the mortgage finance world. And it's my pleasure to welcome you to the Mortgage Bankers Association's Secondary Market Conference and Expo. Thank you for joining us!
We have a great conference planned for you. Over the next two days, you'll hear from leading thinkers, starting in just a few minutes with Dr. Mohamed El-Erian. You'll also hear remarks from FHA Commissioner Brian Montgomery, Ginnie Mae Acting President Maren Kasper, and leaders from other agencies. And you'll have access to break-out sessions filled with expert analysis on the issues that matter MOST to you.
But best of all, we convinced the new FHFA Director to give one of his first major policy addresses this afternoon. After only a month on the job, MBA is pleased to hear from Director Mark Calabria.This all-star line-up reflects the respect that we at the Mortgage Bankers Association have for you. This is easily one of the most important events we host all year, and you're among the most important players in the industry, and the country.
At the MBA, we know the truth: The Secondary Market is of primary importance to millions of people.You ensure that families can get affordable mortgages, in communities large and small.You connect global sources of capital with Main Street, serving the needs of homeowners across the country.
And ultimately, you make the entire economy stronger and more dynamic, benefiting every American... whether they know it or not.
On behalf of the entire team at the Mortgage Bankers Association, I applaud you!
For my part, I respect what you do because I know what you do...Over more than 30 years in the mortgage finance industry, I've seen the Secondary Market from pretty much every angle. I've dealt with Fannie, Freddie and Ginnie. I've worked with Wall Street banks, institutional investors and ratings agencies. PLS, pass-throughs, CMOs. You name it, I know it.But I really gained respect for the Secondary Market in one of my first jobs after college. I was a young 20-something working at a company that doesn't exist anymore - Investors Residential Mortgage. I won't bore you with most of what I did, except to say that my bosses occasionally let me pitch in on our hedging and best-ex strategies.
It took me about 20 seconds before I realized... your jobs are stressful.I still get shivers thinking about it. I had to make quick decisions that involved a lot of money. The lay of the land changed every few minutes - maybe even every few seconds. My choices meant a gain or a loss of thousands of dollars at a time. Come to think of it, that's when I started to lose my hair!What I'm trying to say is that I know what you do. I understand the fast pace, the high energy, the enormous sums, and the big risks. As the President and CEO of the Mortgage Bankers Association, I can assure you that we are fighting to make your jobs easier and you more successful. When you succeed, America succeeds - and at the MBA, we are your advocates in our nation's capital!
Right now, we're working on many important issues that bear directly on the Secondary Market.One of our most important projects is the ongoing effort to improve the efficiency of the market... through the Mortgage Industry Standards Maintenance Organization.
We call MISMO the "language of lending," because it provides every part of the mortgage industry with a common platform to exchange information. Thanks to more than 20 years of hard work, MISMO standards lower the cost of working directly with other private institutions, the GSEs, and government agencies. The benefits are many and tangible.
Thanks to the volunteer efforts of hardworking people from the industry, MISMO has already delivered results... but we're aiming to make it even. Two months ago, we announced a $2 million additional investment in MISMO to support the more rapid development of key standards critical to the industry's path toward a more digital process. Among other things, this funding will help create a uniform dataset for private label mortgage-backed securities.
Everyone here will benefit from these innovations. We created MISMO to help you... and so I urge all of you to join. Get involved in helping to develop the standards and help our industry move faster, more efficiently. We want you to help us drive progress.
At MBA, we're also working directly with lawmakers and regulators to make progress in many key areas. This includes the improvements to the certifications and default taxonomy recently proposed by HUD. It's a good start, and we'll be submitting our own comments soon to suggest improvements. We also look forward to a joint policy statement from HUD and DOJ concerning when the False Claims Act is an appropriate remedy and when it isn't.
We've also achieved success on something that will greatly benefit the Secondary Market. After years of work, Freddie and Fannie will finally launch the Uniform Mortgage-Backed Security... and it will hit the market two weeks from today.
The MBA was one of the earliest advocates for this product, for good reason. Under the current system, Freddie Mac securities are less liquid than comparable securities issued by Fannie Mae, hurting investors and consumers alike. These issues will be directly addressed by the creation of a single, better product that is common to both GSEs.
The final version of the UMBS adheres to MBA's principles. When it goes live in two weeks, the result will be a deeper market that should bring greater liquidity across the board. We're excited to see it.On behalf of the industry, I would like to thank the many dedicated people at Freddie Mac, Fannie Mae, CSS, and FHFA who have worked for years behind the scenes to bring this project to fruition. I would also like to thank Craig Phillips and others at Treasury who have fully supported this effort.And while we can't spike the ball yet, we are very confident that this change will benefit the market over the long run.
We're moving the ball forward on other issues, as well. For example: In Congress, we're working to promote passage of the Self-Employed Mortgage Access Act.
This bill has bipartisan support in both the House and Senate... for good reason. It would better allow lenders to qualify self-employed borrowers for QM loans outside of the GSEs or the government agencies. These individuals already have the ability to repay a mortgage, but because they're self-employed and/or have non-traditional sources of income, they often don't qualify for loans outside of the government-backed channels. They deserve better, and we're committed to help them. This legislation would fix this problem by permitting lenders to move away from the outdated, static requirements of Appendix Q. Instead, lenders could document borrower income through the methodologies already in place in the GSE guides or the FHA, VA, and USDA handbooks.This is a common-sense reform that will benefit millions of consumers. We will not rest until we get it passed by Congress and signed into law.
MBA is also working with the Consumer Financial Protection Bureau to improve the so-called QM Patch... We want to put private capital on a more level playing field with the GSEs.
We all know the current system is flawed. While necessary at the time, the continued reliance on the Patch directs too much of the market to government-backed channels. It helps explain why we haven't seen the return of a truly private MBS market at the level we would have hoped.
The QM Patch is scheduled to expire in less than two years, and a new and improved standard is desperately needed. We're pushing for a rule that fixes two important problems. The first is the use of Appendix Q, as I just discussed, and the second is the cut-off of 43% as a maximum allowable debt-to-income ratio.
Unless these problems are fixed, we fear that many loans that qualify as QMs today will either move to FHA... or not get made at all. That's not right... and we will not let it happen.
At the very least, if the Patch is to be extended temporarily, it should also be expanded to provide safe-harbor status to more private loans - including jumbo loans. Qualified consumers deserve more options and better prices on their mortgages. We will continue to work with the CFPB to make that happen and give consumers and investors the choices and freedom they deserve.
The last issue I'll mention is far and away the most important. The Mortgage Bankers Association continues to be fully focused on Housing Finance Reform.
We're pursuing every angle and pushing regulators and lawmakers to build on the progress that has already been made. More than 10 years after the financial crisis, we still believe Housing Finance Reform is achievable.
One important reason is Mark Calabria's confirmation to head up FHFA.
Director Calabria is a pragmatic man who wants to make permanent progress after a decade of delays. You heard it in his hearings, I heard it in my private meetings with him, and you'll hear it from him later today. This is a man who knows the industry inside and out, and he's committed to preserving what works... and improving what doesn't.
I was in the room when Director Calabria was sworn in. Afterward, he spoke a few words, including that we need to "lock in changes" from the past few years. MBA couldn't agree more. It has been a central theme of our Housing Finance Reform efforts these last few years.
But I was most impressed by Director Calabria during his hearings.
At one point, he pulled out a copy of the 2008 Housing and Economic Recovery Act - the law that created FHFA. It reminded me of how politicians often pull out a pocket copy of the Constitution, and it was clear Director Calabria had read HERA. It was dog-eared and well-worn. I guess that's what you'd expect... from someone who helped write the bill.
Now that Director Calabria is on the job, MBA is in regular contact with his office about Housing Finance Reform. We'll continue to work with FHFA to enact regulations that align with our core principles.Here's what we seek:
Robust competition in the Secondary Market
Access to affordable credit for borrowers
Equitable access and level pricing for lenders of all sizes
Liquidity through the credit cycle
Reliable private capital that protects taxpayers
And an explicit guarantee for Mortgage-Backed Securities backed by conventional loans
In March, MBA led a coalition of more than two dozen groups to call on FHFA to pursue regulations that advance these reforms... We stand with a diverse group of affordable housing advocates, trade associations, and community groups.
And we're also working with Treasury and HUD as they develop plans under President Trump's Executive Memorandum on federal housing finance reform.
Beyond administrative reform, we also seek legislation to address those issues that cannot be undertaken by federal agencies. The truth is that permanent Housing Finance Reform requires action by Congress, as well. That's why MBA continues to work with lawmakers... on both sides of the aisle.I've testified in front of Senate and House committees twice in recent months. I've also held productive meetings with Senator Mike Crapo and Senator Sherrod Brown on the Senate Banking Committee, as well as their counterpart offices in the House.
These leaders have good reasons to get moving on reform before the end of this Congress. Senator Crapo's chairmanship expires next year... and he wants to get reform done first. In the House, Congresswoman Maxine Waters, who chairs the Financial Services Committee, is a long-time advocate for affordable housing. She also has a track record of legislative achievement.
Now, we're not naïve about the hurdles we face. But we do believe that by continuing to work with the key players in Washington, we can be ready to help support legislation... when the time is right.Housing Finance Reform is critically important to our industry... to consumers... and to the American economy. The Mortgage Bankers Association will continue to fight for what needs to be done.
It's been a privilege to address you today.
I know you'll enjoy the program we have planned... but I also know that at a conference like this, much of the action happens in the hallways, in between the sessions and speeches. So I hope you don't mind if I cut my speech short.
I look forward to talking with as many of you as possible over the next few days. By the time you leave, I'm confident you'll have a new appreciation for everything the Mortgage Bankers Association does on your behalf.
We're fighting for you and we're making progress at every turn. With your continued support and leadership, I know... We'll achieve even more in the days ahead.
Thank you.
Hanging out with Hazel, the Vice Presidential Feline, Cat of the United States pic.twitter.com/MEwP1I1161
— Mark Calabria (@MarkCalabria) April 14, 2019
He’s getting started ... on exactly what is what we all want to know.
NAR Research's @GeorgeRatiu joined a panel yesterday at a Greater Piedmont REALTORS® event. pic.twitter.com/JNglNTQwqc
— NAR Research (@NAR_Research) April 17, 2018
Remember The Financial Crisis? Here’s A Must Read Rap Sheet https://t.co/59xkwX3p4g pic.twitter.com/iP9Lt1ku2R
— David Stockman (@DA_Stockman) April 12, 2019
The Equity score. Hasn’t been there for over a year
Zacks Investment Research, Inc. resumes coverage for FED NATL MORT ASSC with HOLD recommendation.
BY Investars Analyst Actions - private
— 3:10 AM ET 04/09/2019
On April 9, 2019 Zacks Investment Research, Inc. resumed coverage for FED NATL MORT ASSC with a HOLD recommendation.
https://www.zacks.com/stock/quote/FNMA?q=FNMA?q=FNMA?q=FNMA