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Federal National Mortgage Association (OTCMKTS:FNMA) Getting Somewhat Favorable Media Coverage, Study Shows
Sunday, July 7th, 2019
Cindy Kellogue
News coverage about Federal National Mortgage Association (OTCMKTS:FNMA) has trended somewhat positive this week, InfoTrie Sentiment reports. The research group rates the sentiment of press coverage by reviewing more than six thousand news and blog sources. The firm ranks coverage of publicly-traded companies on a scale of negative five to positive five, with scores nearest to five being the most favorable. Federal National Mortgage Association earned a media sentiment score of 1.15 on their scale. InfoTrie also gave news headlines about the financial services provider an news buzz score of 10 out of 10, meaning that recent press coverage is extremely likely to have an effect on the company’s share price in the next several days.
Shares of Federal National Mortgage Association stocktraded down $0.03 on Friday, reaching $2.80. 1,216,444 shares of the stock were exchanged, compared to its average volume of 3,370,524. Federal National Mortgage Association has a 1-year low of $0.98 and a 1-year high of $3.27. The stock’s fifty day simple moving average is $2.93. The firm has a market capitalization of $3.24 billion, a price-to-earnings ratio of 4.91 and a beta of 2.26.
Federal National Mortgage Association (OTCMKTS:FNMA) last issued its quarterly earnings results on Wednesday, May 1st. The financial services provider reported $0.01 earnings per share (EPS) for the quarter. Federal National Mortgage Association had a net margin of 11.74% and a negative return on equity of 10.56%. The business had revenue of $4.26 billion for the quarter, compared to analyst estimates of $6.53 billion.
A number of brokerages have recently issued reports on FNMA. Compass Point began coverage on shares of Federal National Mortgage Association in a research note on Thursday, June 20th. They set a “neutral” rating on the stock. B. Riley began coverage on shares of Federal National Mortgage Association in a research note on Friday, April 5th. They set a “neutral” rating and a $2.50 price target on the stock.
https://mayfieldrecorder.com/2019/07/07/federal-national-mortgage-association-otcmktsfnma-getting-somewhat-favorable-media-coverage-study-shows.html/amp
It's my money and I want it now!
Go FnF!
Thanks for the affirmation Stuart!
Go FnF!
Maybe!
Go FnF!
Sit tight! I have been in contact with Morocco Mole. He emailed me from Hannah Barbera headquarters. Agent triple-zero (secret squirrel) is sending the plan to Calamari by micro fish.
Go FnF!
Fannie....taint.....punch line
Go FnF!
Yes come back and tell us what to do and who wins the womens World Cup!
Go FnF!
Oops the bloody Americans are going!
Informed opinion? Not me! I was just informed about the secret squirrel plan. I don't know why Mark didn't bring it up last Sunday at brunch. I will catch him off guard and Hello Kitty him while we watch fireworks.
Go FnF!
Power hour or fizzle hour?
GO FnF!
Nonbank Footprint in GSE Market Continues to Grow
jbancroft@imfpubs.com
Nonbank seller-servicers have steadily grown their share of the GSE market in recent years, drawing more attention from regulators and policy analysts who are concerned about counterparty risk.
Nonbank originators accounted for 50.9% of single-family loans pooled in Fannie Mae and Freddie Mac mortgage-backed securities during the first quarter of 2019, up from a 47.8% share a year ago, according to figures compiled by Inside The GSEs.
Nonbank sales to the GSEs in the first three months of the year were down 10.9% from the same timeframe in 2018, while the overall market was off 16.4% over that period.
Nonbank servicers are also gaining ground. At the end of March, they serviced $1.838 trillion of loans in Fannie and Freddie MBS pools, up 8.3% from the year before. The overall GSE servicing business grew 2.4% over that period. For more details and exclusive tables, see the new edition of Inside The GSEs, now available online.
Third, prepare to move beyond conservatorship.Given the current conversation in Washington and the expected release of the Administration’s Housing Finance Reform Plan, we must prepare for our future and be ready to follow the path set by the plan and by FHFA’s new Director, Mark Calabria. Over the last several years our company has consistently performed well with stable earnings, strong credit quality and a growing credit risk transfer program that is key to our business model. As we embark on our next chapter, we are eager and ready for whatever framework policymakers outline as a pathway out of conservatorship.
Agreed!
Go FnF!
I just thought that I read on this board that the cases overturned/sent back historically take longer. Just my memory of past posts.
Go FnF!
I miss everything. How is it called the secret squirrel plan? It sounds fun.
Go FnF!
?????Why????
Please share!
Go FnF!
Well I made it to a TV to watch CNBC. I found out that Nike is doing well!
Go FnF!
I bet somebody nixed it. National security! Government scam must not be revealed.
Go FnF!
Well? CNBC? IPO? ANYTHING?
Freddie CEO joins Harvard center focusing on housing finance reform
By Hannah Lang
Published July 01 2019, 3:19pm EDT
WASHINGTON — Former Freddie Mac CEO Donald Layton has joined the Harvard Joint Center for Housing Studies as a senior industry fellow focused on housing finance reform, following his resignation from the company on Monday.
Layton, who joined Freddie as CEO in 2012, has spent more than 40 years in the financial services industry, holding roles at JPMorgan Chase and Mastercard, among others.
https://www.nationalmortgagenews.com/news/freddie-ceo-joins-harvard-center-focusing-on-housing-finance-reform
Former Treasury Official Craig Phillips to Deliver Keynote at #NEXTDC19
? Jennifer Hedly
Jul 2, 2019
??
WASHINGTON, D.C., Jul 02, 2019 (SEND2PRESS NEWSWIRE) -- NEXT Mortgage Events, creator of NEXT women's executive mortgage summit, and Housing Finance Strategies, a Washington, D.C. advisory firm founded by Faith Schwartz, today announced that former Treasury Department official, Craig Phillips, will deliver the keynote #NEXTDC19 on November 19, 2019 at Kimpton Hotel Monaco in Washington, D.C.
Craig Phillips recently resigned his position as counselor to Treasury Secretary Steven Mnuchin after serving as the Trump administration's point person on housing matters for two and a half years. Philips was widely regarded as the architect of the administration's forthcoming housing reform plan and has advocated for ending the conservatorship of Fannie Mae and Freddie Mac and returning them to private ownership.
"We're excited to have a keynote speaker with such intimate knowledge of the country's housing reform discussions," said Jeri Yoshida, co-founder of NEXT. "Having Craig Philips share his unique perspective on the nation's housing finance system, in an intimate small group setting, falls right in line #NEXTDC19's value proposition. NEXT events deliver intel that attendees can't get elsewhere."
#NEXTDC19 is the first women's executive summit that brings together Washington policy makers, fintech luminaries, and mortgage lending executives, for a dedicated, ongoing conversation on housing policy's impact on mortgage lenders and fintech providers. The summit's sessions will focus on current policy as well as housing issues that could be impacted by the 2020 election.
"Adding Craig Phillips to our lineup for #NEXTDC19 is a testament to the strength of our alliance with NEXT Mortgage Events and our mutual commitment to promoting the highest quality connection and intel exchange for women executives in housing finance," said Faith Schwartz, president of Housing Finance Strategies.
Registration and additional information is available at https://nextdc19.splashthat.com/. ;
About NEXT Mortgage Events LLC:
In January 2018, NEXT Mortgage Events broke the mortgage industry's unspoken barriers limiting women's access to competitive intel when it introduced NEXT, the mortgage executive summit for women. NEXT is a multi-day, tech-focused symposium based on lending executives sharing competitive intel with other lending executives. A boutique event, NEXT targets a select group of decision making executives: roughly 85-90% of NEXT's lender attendees hold a title of VP or higher and approximately 85% of attendees are women. NEXT hosts several events each year. For more information visit https://NEXTMortgageNews.com, follow @NEXTmtgEvents or email info@NEXTmortgageEvents.com.
About Housing Finance Strategies:
Housing Finance Strategies is a small woman-owned business founded in 2016 to provide Strategic Advisory Services, Government and Industry Relations, Public Policy Expertise, Roundtable and Event Management and Professional Speaking Services to the housing finance industry. The firm brings 25+ years of expertise to the forefront of mortgage, including leading fintech change, advising on GSE reform and ensuring non-bank readiness for regulatory oversight. For more information, visit https://HousingFinanceStrategies.com or email admin@housingfinancestrategies.com.
News Source: NEXT Mortgage Events LLC
https://floridanewswire.com/former-treasury-official-craig-phillips-to-deliver-keynote-at-nextdc19/amp/
Mortgage Giants Fannie & Freddie Eye Market Return in Possible IPO
Wall Street is looking to make them independent again.
In a move that is long overdue, JPMorgan Chase is floating the possibility of an IPO for Fannie Mae and Freddie Mac, Fox Business reports.
Resurrection for Mortgage Guarantors
Both Fannie Mae and Freddie Mac collapsed during the financial crisis as quasi-government entities responsible for insuring millions of mortgages that went bad.
Both Fannie Mae and Freddie Mac were bailed out by the government, which placed them in a conservatorship. The most draconian element of this arrangement was that all net worth of the entities would be constantly swept away and deposited in government coffers.
Over the past 10 years, however, Fannie Mae and Freddie Mac have become profitable again and maintained solid balance sheets. Numerous shareholders and hedge fund managers have said the government’s repeated sweeps are equivalent to robbery.
White Knight Bill Ackman
Outspoken legendary hedge fund manager Bill Ackman, who runs Pershing Square Capital, said as far back as 2015:
“The most illegal act of scale [the government has ever done]…if the US government can step in and take 100% of profits of a corporation forever, then we are in a Stalinist state and no private property is safe — and take your money out of every financial institution, put it into gold or bitcoin and just get the hell out because we’re done, maybe the clothes on your back, but other than that nothing is safe.”
Ackman has long advocated for Fannie Mae and Freddie Mac to be spun back out. He is long both stocks.
He also says now is the perfect time for it to happen.
“Completing one of the largest private capital raises in history necessitates favorable economic and financial market conditions like the current environment, with GDP growth at robust levels, unemployment at record lows, and national home prices and stock market indices at or near all-time highs. We believe that 2019 is the optimal time for action, ahead of the next presidential election in 2020, and that Treasury has a unique opportunity to exercise its warrants in Fannie and Freddie and utilize over $150 billion of these profits to fund key government priorities.”
Obstacles Can Be Overcome
The Treasury Department is apparently on board with this plan, which would be consistent with President Donald Trump’s pro-business agenda. Fannie Mae and Freddie Mac are a cornerstone of the nation’s mortgage market. Without them to secure mortgages below a certain amount, banks will not lend to prospective buyers.
There are numerous political obstacles toward spinning Fannie Mae and Freddie Mac back into independent entities. Congress may or may not need to approve the program but in any event, it has little incentive to act. Despite Republican philosophy to let a company keep the profits it generates, sweeping all that revenue into the Treasury means more money for Congress to allocate to other programs.
Democrats certainly have no incentive to vote for the plan for the same reasons.
Existing shareholders might also be diluted, turning them off to the deal as well.
Fried calamari!
Go FnF!
GSE Buybacks Fall to Second-Lowest Reading Ever
jbancroft@imfpubs.com
Mortgage sellers had to repurchase fewer defective loans from Fannie Mae and Freddie Mac mortgage-backed securities during the first quarter of 2019, although the inventory of pending repurchase claims rose during the period, according to a new tally from Inside The GSEs.
GSE sellers repurchased just $181.2 million of single-family mortgages during the first three months of the year, the second-lowest quarterly buyback total on record. The lowest three-month total, $173.3 million, was posted in the third quarter of last year.
While total GSE buybacks fell 6.0% from the fourth quarter, Fannie reported a much larger drop, 38.2%, in early 2019. Sellers repurchased only $17.3 million in defective loans during the first three months of the year, an all-time low for Fannie.
Freddie repurchases were down as well, but only by 0.5%, highlighting a persistent gap between the two GSEs. For more details and exclusive tables on Fannie/Freddie buybacks, see the new edition of Inside The GSEs, now available online.
Another Rate Drop, and Presto: More Refi Candidates are Created
pmuolo@imfpubs.com
With the interest rate on 30-year fixed-rate conventional mortgages falling to 3.73% last week, an additional 1.3 million mortgagors fell into the category of having an incentive to refinance, according to figures released Monday morning by Black Knight Inc., Jacksonville, FL.
The data analytics firm estimates there are now 8.2 million existing mortgagors who are refi candidates, the largest such cohort since late 2016.
Since November of last year – when rates peaked – 6.3 million mortgage customers have become more likely to refi into a lower-rate mortgage.
Greater refi activity should lead to an increase in originations in the coming months with lending profits fattening the coffers of mortgage bankers from coast to coast.
However, there is a downside to lower rates: An increase in refis most assuredly will lead to writedowns on mortgage servicing portfolios.
Via email
Financial Crisis Investigation
Monday, July 1, 2019 12:45
Since 2008, Judicial Watch has actively pursued documents regarding the unprecedented explosion in the size and reach of the government through its use of $24 trillion for “TARP” (Troubled Asset Relief Program) bailouts, “bank rescues” and the Obama administration’s economic “stimulus” plan. The $200 billion taxpayer bailout of Fannie Mae and Freddie Mac is arguably the biggest government corruption scandal in our history.
Judicial Watch’s efforts have revealed documents showing Congress’ awareness of the poor business practices of Fannie and Freddie at the same time as key members of Congress continued to block attempts to regulate the two Government Sponsored Enterprises (GSEs). A Freedom of Information Act (FOIA) lawsuit that we filed against the Department of the Treasury resulted in documents that revealed details of how the government coerced the CEOs of several major banks to accept TARP funds.
Judicial Watch is continuing to investigate the government corruption that contributed to the financial crisis as well as the corruption behind the TARP, Fannie Mae and Freddie Mac, the nationalization of General Motors and the increase of government power over our economy. We have at least 36 FOIA requests and several FOIA lawsuits pending.
https://m.beforeitsnews.com/v3/opinion-conservative/2019/3470491.html
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AT FNMA
GO FnF! I mean go back up! C'mon en banc!
This is a good time to inform everyone that somebody knows something.
Maybe Mark was overheard yesterday at brunch!
Go FnF!
Actually it was a champagne brunch and he had too many mimosas!
Oh c'mon Yank, that's why it is called a secret!
I would go so far as to say it is one of the best kept secrets in all of Washington. Mark told me that over lunch last week.
Go FnF!
There is zero reason to be a stick in the mud. Even a realistic stick in the mud.
Go FnF!
Yes that is OLD
The Federal Government Takes Control of Fannie Mae and Freddie Mac
AD BY NATIONAL ASSOCIATION OF REALTORS®
Published 09.05.18 11:54PM ET
?
Carol M. Highsmith / Library of Congress
FROM NATIONAL ASSOCIATION OF REALTORS®
Remember the 2008 financial and subprime mortgage crises? Of course you do. So you’ve likely at least heard of Fannie Mae and Freddie Mac. Both Government Sponsored Enterprises (GSEs), Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) buy and sell mortgage-backed securities, purchase mortgages, and guarantee a great number of mortgages in the U.S. Thanks to the deterioration of the housing market, the damaged state of each enterprise’s financial condition, and to avoid placing either or both entities into receivership, these two companies came to public attention when the Federal Housing and Finance Agency (FHFA) placed them into conservatorship on September 6, 2008. This gave the federal government broad control over Fannie Mae and Freddie Mac, and it began working with both enterprise’s boards to reduce losses and operational and credit risk and to stabilize the mortgage and housing markets. Fannie Mae and Freddie Mac have since started making money again, and the FHFA has continued to adjust the goals of the conservatorship. Yet despite assurancesthat conservatorship is not a long-term solution, Fannie Mae and Freddie Mac remain under it, prompting an ongoing debate about when and how to end the arrangement.
https://www.thedailybeast.com/the-federal-government-takes-control-of-fannie-mae-and-freddie-mac
You do a fine job of it!
Go FnF!
Will Fannie and Freddie get a new sibling?
By Andrea Riquier
Published: Jun 30, 2019 4:24 pm ET
Many observers now think that the duopoly that currently exists works well, especially as the two giants are carefully regulated
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After over a decade of stagnation, the race is finally on to release mortgage giants Fannie Mae and Freddie Mac from government control and reshape the housing finance system.
The devil is, as always, in the details — except that some of the “details” aren’t so limited in scope. One of the biggest questions in play right now revolves around the question of whether Fannie and Freddie will continue to operate as a duopoly. It’s a question with enormous implications: trillions of dollars of business for industry participants, and access to the American Dream for ordinary households.
As a brief reminder, the two companies were chartered by Congress decades ago to provide liquidity to the U.S. mortgage market. Fannie FNMA+0.26% and Freddie FMCC don’t make mortgages, but buy the ones that lenders extend to borrowers, helping free up more capacity for the banks to go out and lend more.
During the housing bubble of the early 2000s, the two competed with all kinds of private-sector mortgage players. They extended too much, and too-risky, credit, leading to a liquidity crisis. As the financial system melted down in 2008, they were rushed into government control.
That’s where they’ve remained, until now, as Congress has failed to find a permanent solution for how to release them, and for what the future housing finance system should look like.
The current state of affairs is troubling for a few reasons. The two companies currently guarantee about 45% of all new mortgages, according to data compiled by the Urban Institute. They have almost no capital buffers, as a result of a strange experiment from legislators who tried to force themselves into taking action on the matter. And no one has any idea whether the future state will look a lot like the current one, or be drastically different.
Right now, most housing-watchers are focused on one idea in particular. It was mentioned in a report filed by the two enterprises’ regulator, the Federal Housing Finance Agency, last week.
“The Enterprises’ current duopoly undercuts competition in the market,” said FHFA director Mark Calabria in the regulator’s annual report to Congress. “Increased competition would reduce market reliance on either Enterprise and enhance market stability, as well as benefit home buyers. To promote competition, Congress should authorize additional competitors and provide FHFA chartering authority similar to that of the Office of the Comptroller of the Currency.”
That idea isn’t new. It’s been contemplated ever since the two have been in conservatorship, and expressed more explicitly as a goal in a memo from the White House to the Treasury Department in March.
See: Fannie and Freddie stock moves may be insider trading, watchdog groups suggest
And it is important to note that it’s highly unlikely Congress will make any motion toward housing finance reform of any kind, least of all something as weighty as allowing a regulatory agency to charter a private company alongside Fannie and Freddie, with the ability to guarantee millions of mortgages, possibly with some implied government support in doing it.
https://www.marketwatch.com/amp/story/guid/32AD2478-911B-11E9-A055-5523C52D343F
Ok. I can Roll with that! I think.
Go FnF!
Good one! You made me look.
Go FnF!
"To protect the tax payer" Isn't that the mantra that TBTF have hung their hat on since they started trying to kill FnF? I am not saying that it is a legitimate reason. We know it is not. It is the perpetual false narrative. The public through the media keep gobbling it up.
Go FnF!
As Talk about GSEs' Overhaul Swirls, Multifamily Makes a Good Case
WASHINGTON DC—There has been plenty of talk coming out of Washington, DC that attention will finally turn to Fannie Mae and Freddie Mac to bring them out of conservatorship. Head of the Federal Housing Finance Agency Mark Calabria, in particular, has been very vocal about the GSEs’ need for an overhaul.
These signals are already having an impact on borrowing costs, as the Wall Street Journal recently reported: Securities issued by Fannie Mae and Freddie Mac are trading at a growing discount compared with securities sold by Ginnie Mae and this widening gap is attributed to investor anxiety about a change.
The multifamily market is a small piece of GSE activity, but it is vital to the commercial real estate industry. So far, there has not been any concrete proposals about what will happen with that piece of GSE lending.
But as the debate in the White House intensifies and multifamily is brought into the loop, it is hoped that the GSEs’ track record on delinquencies will have some influence on any decisions the Administration makes. A newly-released CBRE report helps to make this case.
Low Levels of Delinquencies
The report, authored by Jeanette Rice, CBRE’s Head of Multifamily Research for the Americas, shows that multifamily mortgage delinquency rates remain at very low levels, a healthy—and underappreciated—performance metric for the sector. Delinquency rates for all commercial real estate are also favorable, but multifamily rates remain under the broader averages.
“Multifamily mortgage delinquencies dropped to very low levels several years ago and have remained there,” Rice writes. “The sustained health of multifamily loans is a significant characteristic of the multifamily industry today even if rarely discussed.”
The report adds that the near-term outlook is favorable but that an economic downturn will lead to higher delinquency rates. That said, the next recession is unlikely to be a repeat of the 2009 downturn. Rather, according to CBRE, “the experience of the early 2000s recession may be a better guide to possible delinquency severity during the next downturn.”
With that in mind CBRE did a deeper dive into the GSEs’ track record.
Fannie Mae historical data reveals three principal trends, the report said. First, at the worst following the 2008 recession, delinquency rates were still less than 1%, peaking at 0.8% in June 2010. Second, during the early 2000s recession, delinquencies reached only 0.3% at the highest in late 2001. Third, over the past four years, delinquency levels have remained very low, averaging only 0.07% from 2014 to the present.
Freddie Mac’s delinquency rates have also remained very low for several years, the report noted. From 2014 through the present, delinquencies averaged only 0.02%. Based on available historical quarterly data, following the last recession, Freddie Mac’s delinquency rates topped out at a modest 0.36% in Q3 2011. In the early 2000s recession, delinquency peaked at only 0.15% in Q4 2001.
Other Lending Channels
CBRE took a look at other forms of finance such as bank lending and CMBS. For banks, since the 2008 recession, multifamily posted lower delinquencies than nonresidential commercial real estate mortgages. In the last recession, bank multifamily delinquencies peaked at 1.76% in Q1 2010. In the early 2000s recession, delinquency reached a more moderate high of 0.56%, CBRE said.
As for CMBS, today its multifamily delinquency rate is well below other property types at the low level of 0.37%. But in the last recession, the CMBS experience was different from that of the agencies and banks and likely life companies as well, CBRE said.
“Multifamily delinquency soared, arguably due to the looser underwriting and lower quality of multifamily product originated by conduit lenders compared to other lender types, and exceeded that for all commercial real estate,” Rice wrote.
However, multifamily delinquency began to recover earlier than the other property sectors and declined at a faster pace, the report noted. “Two years ago, CMBS multifamily delinquency levels fell under 0.5% and have remained under this level for the past two years. However, in the past few quarters, delinquencies have inched up slightly. This rise is not a concern at the moment, but worth watching.”
https://www.globest.com/2019/06/28/as-talk-about-gses-overhaul-swirls-multifamily-makes-a-good-case/
The subject of whether the two main government-sponsored enterprises (GSE’s) in mortgage risk, Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), should buy earthquake insurance was raised at a Senate hearing this week.
At a hearing of the full U.S. Senate Committee on Banking, Housing and Urban Affairs titled “Should Fannie Mae and Freddie Mac be Designated as Systemically Important Financial Institutions?” the topic of earthquake risk arose, especially in regards to the concentration in California.
We’ve highlighted before the enormous unhedged risk that the government and taxpayers bear as Fannie and Freddie’s exposure to earthquake risks is uninsured and at the same time the vast majority of homeowners themselves do not have earthquake insurance either.
The GSE’s do not mandate that the mortgages they guarantee are covered with earthquake insurance, even in peak risk zones of the United States.
At the same time, the GSE’s do not purchase their own earthquake insurance protection, to cover the collateral of mortgage loans they own or guarantee.
The result is a situation that could see an immense burden placed on the government and ultimately taxpayers, if there was a catastrophic earthquake event that drove a significant amount of mortgage loan defaults.
It was previously estimated by public policy researchers at R Street that the total value of uninsured earthquake exposure held by Fannie Mae and Freddie Mac could amount to as much as $205 billion.
That’s an enormous exposure to go unhedged, particularly when the insurance, reinsurance and insurance-linked securities (ILS) markets are so well-equipped to cover much of that risk.
The Senate hearing was held to discuss the potential for Fannie and Freddie to pose a systemic risk.
The $200 billion plus of earthquake exposure that is uninsured seems systemic enough alone, without even considering the mortgage default risk and other economic factors the GSE’s are exposed to.
“We have a key opportunity right now, while the sun shines on our economy and mortgage markets are healthy, to put our housing finance system on a durable, sustainable course that can withstand any market cycle. “My strong preference is for comprehensive legislation,” U.S. Senator Mike Crapo (R-Idaho), Chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs explained.
“We are also interested in analyzing some of the options currently available to the Administration to protect taxpayers and put our housing finance system on stronger financial footing,” he continued.
One route to putting a buffer between the potential financial exposure of Fannie and Freddie and taxpayers would be to encourage the purchase of an appropriate level of earthquake risk transfer or insurance, while also enforcing a mandated purchase of quake protection by mortgage loan holders that the GSE supports.
Clearly this would need significant risk transfer capacity, but given the capital available in reinsurance and insurance-linked securities (ILS) markets right now, purchasing the protection should not prove a particular issue.
More of an issue is the government’s willingness to impose a financial burden on the GSE’s and mortgage holders more generally, even though anyone can tell that the earthquake risk problem and lack of insurance for it is a major exposure waiting to hit the U.S. economy.
On the main subject of the hearing, should Fannie Mae and Freddie Mac be designated as systemically important financial institutions (SIFI), there is a widely held view that they are, given the economic exposures involved.
But as systemic holders of uninsured earthquake exposure the GSE’s tend to get less attention, even though for the peak earthquake zones such as California the fact all this mortgage loan collateral is unprotected against a major natural catastrophe would certainly prove a significantly impactful event.
It’s encouraging to see the topic aired during the discussion of the GSE’s SIFI status and it is to be hoped that the topic can go on to be aired in other political forums, to encourage someone to take action on the crisis waiting to happen that is the United State’s un(der)insured earthquake risk exposure.
https://www.artemis.bm/news/fannie-freddie-quake-risk-transfer-raised-at-senate-hearing/
3R vs. 3D
Go FnF
It is about time for a well planned positive bit of news or rumor or fake news to send us up to $3.??. It will keep happening as long as folks keep selling over $3.00. One day it will not be knocked back down. Come on en banc, court, treas., or......
Go FnF!