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Seems like Mnuchin's quotes do not call for Congressional action. The author does.
Probably another buying opportunity if enough weak hands fall for this.
Go FnF!
It seems like author mixed their personal opinion with Mnuchin quotes. I smell (as doc would say) B.S.!
Go FnF!
I can tell you that we need to call during business hours. On the weekends they will only take emergencies. Their definition of emergency (local rule 27.3) is different than mine. If it is an emergency you could press 2 to be connected to the emergency duty deputy.
I wonder if we could get some attention if they received several or a bunch of calls because we think this constitutes an emergency. Or would we get a personal visits from a real deputy for tying up an emergency phone line? I am tempted to press 2.
Go FnF!
At least they can't kill FnF. They are as American as baseball, (costco) hot dogs, apple pie and Honda.
Go FnF!
You just gotta remember, TBTF thought and still think that FnF need killin.
You are a hoot early in the morning. You are fun to decipher over coffee. But I do get it.
Have a good weekend!
Go FnF!
Six more weeks of drinking and sex.
Go FnF!
ARNOLD?
Has anybody read or heard anything concerning uplist/relist to a major exchange? I do not recall anybody who matters publicly stating any info about getting out of these dirty pink sheets.
Go FnF!
A pile is more than a truck load but less than a shit ton.
Go FnF!
There is a really funny joke in there about en banc and gap filling and Jennifer Aniston and being willing to wait.
Go FnF!
Any Fannie, Freddie IPO Would Be Years Off, Raymond James Says
By Felice Maranz June 6, 2019, 7:40 AM EDT
Mortgage giants need to rebuild capital, set earnings history
A long list of “preparatory steps” means that any potential Fannie Mae and Freddie Mac initial public offerings are at least three to four years away, according to Raymond James.
Before any IPO, analyst Ed Mills wrote in a note, the mortgage giants, or government- sponsored enterprises (GSEs), need to build around $200 billion to $250 billion in capital reserves. The question of how much money they send to the U.S. Treasury Department has to be addressed, too. And Mills expects Fannie and Freddie to need several years of “established earnings history” under new rules as well.
That’s not all. Other open issues include: The qualified mortgage, or QM, "patch"; the future of GSEs’ multifamily businesses; potential changes to underwriting standards; any impact on the new uniform mortgage-backed security, and “how any implicit or explicit government backing would work.”
Mills also cautioned that “the results of the 2020 elections could add some friction to the process,” if Democrats recapture the White House and make gains in Congress.
Fannie Mae shares have soared 200% so far this year, while Freddie’s have rallied 188%, boosted by speculation government changes will benefit shareholders. The stocks jumped in the wake of Donald Trump’s 2016 election, then fell amid pessimism about the outlook for mortgage finance overhaul.
https://www.bloomberg.com/amp/news/articles/2019-06-06/any-fannie-freddie-ipo-would-be-years-off-raymond-james-says
I think that you are jealously protecting your algorithmic algorithm. Is 3X3 competition for your patent?
Go FnF!
3X3 EXEMPTION TODAY?
Administration infighting could delay public offerings of Freddie, Fannie: Charlie Gasparino
https://video.foxbusiness.com/v/6044555828001/#sp=show-clips
I don't think that gap will fill.
Go FnF!
Drops mic.
There I said it for you.
Go FnF!
FnF will evolve into cursorial beasts.
Go FnF!
It was nice to see support when they tried to take it down e.o.d.
Go FnF!
Excuse me. I will be back with some popcorn. This is getting fun again. I have seen it before.
Go FnF!
Opinion With GSE reform, change carries a multitude of risks
By
Christopher Whalen
Published June 04 2019, 10:45am EDT
Since Federal Housing Finance Agency Director Mark Calabria was approved by the Senate, he has set an aggressive timeline for shaking up the housing finance system by ending the conservatorship for Fannie Mae and Freddie Mac. Calabria says that the status quo is no longer acceptable. He aims for Fannie Mae and Freddie Mac to begin the process of exiting conservatorship and rebuilding private capital by the beginning of 2020.
As Calabria approaches his task, the respected economist and former congressional staffer inherits a policy narrative that is cluttered with a variety of views and assumptions that may make sense within the confines of Washington, but may not jibe with the world of mortgage finance. Chief among them is the assumption expressed by some significant players in the discussion that we can have government-subsidized housing while reducing the taxpayer support for the GSEs and putting the emphasis instead on private capital.
The objective, Mark Zandi of Moody's Analytics recently told an audience at the Urban Institute, is to preserve the benefits of the GSEs in terms of the price of credit and the availability of a 30-year mortgage, while reducing the risk to taxpayers via risk sharing and other measures. Indeed, our colleague Eric Kaplan of Milken Institute went so far as to say that private investors prefer and are more comfortable buying credit risk from Fannie Mae and Freddie Mac than investing in private mortgage loans, where they face first loss in the event of default.
What's interesting about this Washington narrative is the virtual absence of any discussion as to how these proposed administrative changes in the status of the GSEs could directly impact the world of mortgage finance for lenders and end investors. We talked about this issue in a previous comment ("Can we privatize Fannie Mae and Freddie Mac? Really?").
The assumption that conservatorship can end without significant changes in how the GSEs operate may be the most dangerous assumption of all. Diana Olick of CNBC, for example, reported on May 29 that investors are already pulling back from GSE debt securities and MBS out of fear that under Director Calabria the government guarantee for the GSEs may be in question.
While there was a lot of discussion at the Urban Institute and previously at the Mortgage Bankers Association's National Secondary Market Conference in New York about restoring competition to the mortgage markets, there seems to be little appreciation as to how such changes will impact the credit profiles of the GSEs and, more important, the perception of investors.
Global investors know and trust the credit of Ginnie Mae, acting head Maren Kasper told the audience at the Urban Institute. Sadly, the same cannot be said about the brand of the GSEs with global bond investors. For example, under the present situation of conservatorship, both Fannie Mae and Freddie Mac have the same credit profile as Ginnie Mae — full faith and credit of the United States. Loans eligible for pooling for all three agencies are essentially government risk.
Once the Treasury exercises its warrant, sells its shares and thereby recovers its investment in the GSEs, the enterprises will then be quasi private federally chartered nonbank finance companies with a $250 billion combined credit line from Treasury. Almost overnight if not before, the credit markets will no longer treat the GSEs as the same credit risk as Ginnie Mae with its statutory full faith and credit guarantee.
At a minimum, the debt and mortgage backed securities guaranteed by the GSEs should reflect the 20% weighting assigned for the purposes of risk capital weights for US banks and insurance companies. Ginnie Mae securities, like Treasury debt, has a zero risk weight. Indeed, the Federal Open Market Committee may be legally obliged to sell its GSE MBS holdings once they are no longer officially "obligations of the United States."
So let's assume for the sake of argument that, under Director Calabria's administrative reforms, the cost of funds for the GSEs slowly increases above the spreads for Ginnie Mae securities — this to reflect the change in the credit standing of Fannie Mae and Freddie Mac. Remember, once these entities exit from the conservatorship, they are basically private nonbank mortgage firms like Mr. Cooper or Quicken, with limited private capital and a credit line from the Treasury.
Will this significant legal change be reflected in the pricing of and haircuts applied to bank warehouse facilities and repurchase transactions for GSE eligible collateral? Would GSE loans financed via a repurchase transaction require a margin? Probably yes. That's a hint. Indeed, once the GSEs are again "private" nonbanks, Ginnie Mae will be a clearly superior credit and may have substantially better execution in the secondary market than the GSEs. What does this imply for housing policy?
"The idea that there is some amount of private capital that gets you to the same market acceptance as either conservatorship or an explicit guarantee from Treasury strikes me as wishful thinking," noted Michael Bright, CEO of the Structured Finance Industry Group and former COO of Ginnie Mae. "Any outcome that does not involve explicit credit support for the GSEs runs the risk that markets and particularly global investors will not accept it."
Another aspect of the administrative change for the GSEs anticipated under Director Calabria is an end to the special treatment under the Dodd-Frank rule for qualified mortgages. Under the rubric of enhancing competition in the mortgage finance space, some policymakers advocate ending the so-called patch under the QM rule that treats all agency mortgages as coming under the legal safe harbors in the QM regulation.
"The exemption, known as the GSE 'patch,' sunsets in January 2021 or when the conservatorships end, whichever comes first," Kate Berry reported in February. "Unless the patch is extended or the CFPB eases underwriting requirements for all loans, nearly a third of loans backed by the GSEs could face new legal liability."
When asked how much of the current flow of GSE mortgages would be affected if Calabria declines to renew the QM patch, one of the leading bankers in the mortgage securitization market said 30% at a minimum.
https://www.nationalmortgagenews.com/opinion/with-gse-reform-change-carries-a-multitude-of-risks
Debt Wreck 2.0 excerpt
The low point of the 2008 financial crisis was just over a decade ago, but lessons that should have been learned have already been forgotten. The debacle that was U.S. subprime mortgages has come back to life in a smaller way. The U.S. mortgage giants Fannie Mae and Freddie Mac have been busy cutting back on the down-payments required and loosening restrictions on the minimum income a borrower needs to service a loan. Lending quality on FHA loans favored by first-time home buyers is particularly poor. This time around it will be U.S. taxpayers picking up the tab through the government ownership and insurance of the mortgage aggregators.
It’s not just the U.S. where dubious mortgages are proliferating. Canada, Spain, several Northern Europe countries and Australia have all been called out for excessively easy housing credit.
Global high-yield debt markets seem determined to go beyond the stupidity seen in 2006 and 2007. The collapse in covenants, which function as an early warning sign for lenders, is a flashing red light that lenders are desperate to push money out the door on almost any terms.
In the lead-up to the financial crisis, covenant-lite leveraged loans were less than 30% of total leveraged loans. Borrowers that were given covenant-lite loans typically had B+ or higher ratings, having some level of inbuilt cushion. Today only the worst of the worst borrowers can’t obtain a covenant-lite loan.
Holders of covenant-lite loans should expect a slew of their borrowers to slowly bleed to death, with the lack of covenants having cut off their ability to take early action when the borrower still has some equity value.
Global high-yield debt markets seem determined to go beyond the stupidity seen in 2006 and 2007.
It’s a similar story for sovereign debt as the European debt crisis is likely to re-emerge in the coming years. Italy’s economy is showing the same signs that Greece did before its ongoing debt crisis, but Italy is almost 10 times bigger.
The doom loop of bank failures leading to government failures and vice versa hasn’t been fixed, increasing the risk of systemic and cascading failures. Deutsche Bank’s share price hitting record lows shows it remains an enormous risk, but there are dozens of small- and medium-size banks in Italy and Spain that have and will continue to call upon their governments for additional bailouts.
In the U.S., a wide swath of state and municipal governments continue to run up their debts as well as accruing pension and health-care obligations. States such as Illinois can add population decline to their list of issues, which reinforces the downward cycle as the smaller remaining population needs to regularly increase taxes to cover the increasing interest and pension obligations.
The defaults of Detroit (2013) and Puerto Rico (2016) show what lies ahead for bondholders. Heavy debt haircuts will be required to allow these jurisdictions to right their financial position.
Emerging and frontier markets are now showing signs of kicking off another cycle of defaults and restructurings. The last year has seen Argentina, Pakistan and Turkey go from having easy access to debt markets to now needing assistance to meet their upcoming debt maturities. A slew of frontier economies including Iraq and Tajikistan have used the loose lending of recent years to issue debt despite having obvious challenges in meeting future repayments.
Conclusion
It has often been said that those who do not remember the past are doomed to repeat it. The investment decisions made by some in recent years bear the hallmarks of the speculative investments made before the tech wreck and the financial crisis. With the recent pullback in several high-profile tech shares and bank shares and the surging yields for a handful of emerging-market sovereigns, we might be witnessing the beginning of a necessary and inevitable process of taking out the investment trash.
https://www.marketwatch.com/amp/story/guid/E00FD51A-8640-11E9-8AC6-A54F81262F19
Trump’s move to take Fannie and Freddie private could mean higher mortgage costs
KEVIN REBONG JUN 4, 2019 10:40 AM
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FHFA director Mark Calabria (Credit: Federal Housing Finance Agency and iStock)
The Trump administration’s plan to return Fannie Mae and Freddie Mac to private ownership, which the president has called a “pretty urgent” issue, may come with some politically inconvenient truths for 2020.
Mark Calabria, the new director of the Federal Housing Finance Agency, insists that the companies raise capital buffers before his agency releases them from government control. One result of these requirements will likely be higher fees for lenders that the companies insure, which will then lead to higher mortgage costs, Bloomberg reported.
“It’s unnecessary and doesn’t make any sense,” Mark Zandi, chief economist of Moody’s Analytics, told Bloomberg. “Higher mortgage rates will raise payments and reduce demand. Less demand will mean lower house-price growth.”
As President Trump ramps up his reelection campaign with an approval rating stuck below 45 percent in most polls, the health of the U.S. economy could become a key factor in his drive for a second term. Higher mortgage costs would put further pressure on an economy already wobbling as a result of the trade warwith China.
Previous capital requirements for Fannie and Freddie were suspended in 2008 when the agencies were put under government control. A final plan for new rules is expected to be released later this year.
Though the Trump administration has publicly said it wants to work with lawmakers to finally put an end to the mortgage guarantors’ decade-long conservatorship, plans are also being made for a unilateral move that bypasses Congress. The backing of Calabria, a Trump appointee, will be necessary to execute any such plan.[Bloomberg] — Kevin Sun
https://therealdeal.com/national/2019/06/04/trumps-move-to-take-fannie-and-freddie-private-could-mean-higher-mortgage-costs/amp/
Oh no, that means the gap will fill. Here we go again.
Go FnF!
HAHAHAHA!
Going up?
Go FnF!
Feel good language to grease the skids.
Go FnF
FHFA's Calabria urges reg relief for homebuilders
By Hannah Lang
Published June 03 2019, 1:32pm EDT
HUD
WASHINGTON — Federal Housing Finance Agency Director Mark Calabria blamed "burdensome" homebuilding regulations at the local level for helping to drive up housing costs nationwide.
In a speech Monday, Calabria detailed how rising home prices are made worse by the lack of housing supply. He attributed the growing problem to government mandates, zoning ...
Subscribe Now sorry I am not advertising for them.
https://www.cujournal.com/news/fhfas-calabria-urges-reg-relief-for-homebuilders?feed=00000158-bac9-d5d7-aff8-bbf93dc20000
Uniform Mortgage-Backed Security Launches
https://themreport.com/daily-dose/06-03-2019/uniform-mortgage-backed-security-launches/amp
There really is no controversy here.
It happens. Today or tomorrow. With very few exceptions she likes her gaps filled.
I will keep it clean
Go FnF!
How irresponsible! Your apathy has doomed us all!
Go FnF!
Well aren't you the life of the party. Stay out of my fantasy!
No. Feel free to do so.
But who dropped the prune and where does the sidewalk lead to?
Whaleballs toys with us.
Go FnF!
obiterdictum that is undeniable proof that you are not HAL. It is good to read your posts again.
Go FnF!
Yes I sold. I have been building my core position for years. I held through $6.35. I bought more on dips through the years and I have held every pop since. Now that we are in the middle of the endgame I sold at $3.00. LOL
NOT!
GO FnF!!!
Gonna have another $3 battle!
Go FnF!
Both!
Go FnF!
Wall Street Informant Turned Over Chats in Fannie Bond Case
Tom Schoenberg, Bloomberg News
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A pedestrian walks past the Federal National Mortgage Association (Fannie Mae) headquarters in Washington, D.C., U.S., on Thursday, Nov. 8, 2018. Fannie Mae shares rose 5.5 percent in October, more than any full-day gain since Aug. 27 and almost quadruple the U.S.'s benchmark index. , Bloomberg
(Bloomberg) -- Lawyers who have accused Wall Street banks of rigging the price of Fannie Mae and Freddie Mac bonds have a cooperator who is providing “smoking gun” evidence including electronic chats, according to a new court filing.
The cooperator isn’t identified as a company or individual in the complaint filed Thursday in Manhattan. Only one institution appears in all the chats: Deutsche Bank AG. It’s also described as a co-conspirator and not a defendant. The bank declined to comment.
The lawsuit includes chats between traders at Deutsche Bank and others at Goldman Sachs Group Inc., Morgan Stanley and BNP Paribas SA. It accuses more than a dozen financial institutions of ripping off pension funds and others from 2009 to 2016.
Lawyers for the plaintiffs, including the treasurer of Pennsylvania, said chats and other information were received from a cooperating co-conspirator who discovered the conduct in January 2016.
Last June, Bloomberg News reported that the Justice Department had opened a criminal investigation into whether some traders manipulated prices in the market for unsecured bonds issued by Fannie and Freddie, the government-backed companies whose financing underlies most U.S. home purchases. The market for their agency debt -- which doesn’t directly finance mortgages -- runs into the hundreds of billions of dollars. No individuals or banks have been charged.
The complaint filed on Thursday alleges that the chats about the pricing of the bonds in the secondary market also directly implicate Barclays Plc, Bank of America Corp., Citigroup Inc., Credit Suisse Group AG, First Tennessee Bank NA, JPMorgan Chase & Co., Nomura Holdings Inc., UBS Group AG, HSBC Holdings Plc, TD Securities Inc. and Cantor Fitzgerald LP.
Representatives of Morgan Stanley, Nomura and Cantor Fitzgerald didn’t immediately respond to requests for comment. The other banks declined to comment.
In addition to Fannie Mae and Freddie Mac, these government-sponsored-enterprise (GSE) bonds finance the Federal Farm Credit Banks and the Federal Home Loan Banks.
The complaint published portions of four chats that the pension funds claim are examples of improper coordination among the banks. The chats name the banks but not the traders. While multiple banks are involved in each chat, a Deutsche Bank trader is involved in all four.
In one from Feb. 17, 2012, traders at Deutsche Bank, BNP and Morgan Stanley were trying to sell about $390 million in Federal Home Loan Bank bonds that they won at a joint auction four days earlier.
“I just don’t want to create a race to the bottom between the 3 of us, doesn’t help anyone,” a Morgan Stanley trader wrote.
“ugh this thing is a pig,” wrote the Deutsche Bank trader, who then proposed a free-to-trade price of $99.985.
“Sure FTT at 99.985,” the Morgan Stanley trader responded.
“Good by me,” the BNP trader said.
More: Wall Street’s Legal Nemesis Is Sidelined in Fannie Rigging Case
The lawsuit, filed by lead plaintiff attorneys with Scott + Scott and Lowey Dannenberg who are seeking class-action status, didn’t name any individual traders. An earlier complaint, filed by another law firm that lost its bid to be lead counsel, identified 27 traders by name as “key personnel” on their firms’ trading desks, though it didn’t accuse them of wrongdoing.
Traders of these agency bonds were a close-knit group who often attended the same industry events and socialized with one another, according to the new complaint. Some of that closeness was reinforced by the way such bonds were sold -- with three banks working together on each issuance. Because of that structure, restrictions on communications placed on other traders in the wake of criminal investigations into the rigging of currency and benchmark interest rates didn’t always apply to agency-bond traders, the complaint says.
The traders improperly used information they had from underwriting agency-bond issues to help them manipulate the price of the bonds on the secondary market, the plaintiffs say. This structure was known among industry players who nicknamed these trading desks “Casino Royale,” a reference to the James Bond film, the filing said.
U.S. District Judge Jed Rakoff, who has set a May 4, 2020, trial date, will decide whether the case will have class-action status.
To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net
To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, David S. Joachim
©2019 Bloomberg L.P.
https://www.bnnbloomberg.ca/wall-street-informant-turned-over-chats-in-fannie-bond-case-1.1264049
The future of the FHFA
One much-anticipated meeting at Midyear was with newly appointed Federal Housing Finance Agency Director Mark Calabria. Many have been nervous about Calabria’s criticism of the government’s role in housing finance, especially since the administration announced plans to end conservatorship of government-sponsored entities Fannie Mae and Freddie Mac. Calabria told Midyear attendees that his intention is to “level the playing field to where all large financial institutions have similar capital.” This will ensure the GSEs “have a good business model because they have good management and good execution — not because they have lower standards than everyone else,” he said.
Calabria also assured the group that he has no plans to change loan limits during his tenure at FHFA and underlined support for the 30-year mortgage, an institutional lending tool of which he has been critical in the past.
The session gave NAR an opportunity to highlight its housing finance reform plan, which proposes transitioning Fannie Mae and Freddie Mac into private, shareholder-owned utilities that would continue to purchase, guarantee and securitize single-family and multifamily mortgage loans.
https://bostonagentmagazine.com/2019/05/23/view-d-c-top-takeaways-nars-midyear/
What is Germany doing?