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Freddie and Fannie is trading differently today. Freddie is green!
Yeah! We are at HOD!
It looks like we are setup for another pop up tomorrow morning.
It looks like we are setup for another pop up tomorrow morning.
I remember it used to move 20% everyday. Moving 10% everyday is fine with me. A little slower but still profitable.
I got a buy set for $1.55. Let see if I can get it filled. If it goes higher than great. I have a big portion still holding. If I get the $1.55 filled than great. More shares to my collection.
Power hour is coming!
Weeeeeee
I will start buying more and averaging down soon. No choice but to buy more.
It will start moving up from here!
http://mobile.bloomberg.com/news/2013-06-10/fannie-freddie-shareholder-suit-challenges-u-s-takeover.html
Fannie Mae and Freddie Mac shareholders sued the U.S., alleging that the 2008 takeover of the housing lending giants was illegal and cost investors billions of dollars.
The takeover of the mortgage companies by the Federal Housing Finance Agency, “while beneficial to the economic welfare of the nation, destroyed the value of Fannie Mae’s and Freddie Mac’s common and preferred stock and trampled the private ownership rights” of shareholders, according to the complaint filed yesterday in the U.S. Court of Federal Claims in Washington.
The shareholders’ complaint seeking $41 billion in damages was filed by the Seattle-based law firm Hagens Berman Sobol Shapiro LLP, a lead counsel in class-action lawsuits including those against Toyota Motor Corp. (7203) over the unexpected sudden acceleration of vehicles.
Investors in Fannie Mae (FNMA) and Freddie Mac have taken a renewed interest in the companies’ future now that they have started posting record profits as the housing market rebounds. Fannie Mae had its best year ever in 2012, reporting net income of $17.2 billion for 2012, outpacing S&P 500 companies such as Wal-Mart Stores Inc. (WMT), General Electric Co. (GE) and Berkshire Hathaway Inc. (BRK/A), according to data compiled by Bloomberg.
Freddie Mac, the smaller of the two, reported earning $11 billion last year. Both have said they expect to remain profitable.
Share Increase
Investors are speculating that the companies might repay their debt to taxpayers and exit government control. In the past three months, investors have bid up the companies’ common stock eightfold to a recent peak of more than $5.
Preferred shares have more than tripled, rising to more than $8. Fannie Mae’s common shares fell 3.5 percent to $1.91 yesterday after the complaint was filed. They rose 3.7 percent to $1.98 today.
The U.S. Treasury Department determined the terms of the government’s financial agreements with Fannie Mae and Freddie Mac. (FMCC) Adam Hodge, a Treasury spokesman, declined to comment on the lawsuit.
The two companies, which package mortgages into securities on which they guarantee payments of principal and interest, were seized by regulators as they neared bankruptcy. They drew $187.5 billion in taxpayer aid to stay afloat.
Bullied, Coerced
“The government bullied and coerced the companies’ boards of directors” into consenting to the takeover at the expense of property rights, according to the complaint.
“The companies’ willingness to continue providing liquidity to the mortgage markets on a large scale was crucial to the recovery of the devastated home market and the broader economy,” lawyers for the plaintiffs wrote. “The government took control of the companies to make sure this happened on its terms, completely ignoring the loss of rights and economic value it caused to the shareholders.”
Leading up the government takeover, Fannie Mae’s and Freddie Mac’s “financial status did not warrant the imposition of conservatorships,” the shareholders said in their complaint. They argue that neither company satisfied any of 12 financial and other criteria for a takeover outlined in the Housing and Economic Recovery Act of 2008.
The government forced Fannie Mae and Freddie Mac to delist their shares, terminate shareholder meetings, assume additional subprime assets and “accept tens of billions of dollars from the Treasury,” according to the complaint. “In exchange, the companies were forced to grant the Treasury unprecedented and usurious cumulative dividends of 10 percent to 12 percent.”
Housing Recovery
Now that the firms are profitable, “it’s reasonable to expect” there will be more lawsuits like this, said Tim Rood, a former Fannie Mae executive who is now a managing director at Collingwood Group LLC, a financial services consulting firm based in Washington.
The government “conservatorship is really the most unprecedented of unprecedented takeover events,” Rood said in a phone interview.
“It becomes increasingly difficult and indefensible to reconcile the fact that they have claims on all of the profits but don’t take any of the liabilities on balance sheet,” Rood said.
Under the terms of the conservatorship agreement, the liabilities of the two companies don’t appear on the government’s balance sheet.
Exiting Conservatorship
There is no provision for Fannie Mae or Freddie Mac to exit conservatorship under their current agreement with the Treasury.
Instead, the government takes all of their quarterly profits, which count as a return on the U.S. investment in the firms, and not as repayment of their debt.
That arrangement forces “Fannie Mae and Freddie Mac to completely and fully transfer any remaining economic value from their shareholders to the Treasury, guaranteeing that the shareholders are left with nothing,” according to the complaint.
The damages sought in the lawsuit were calculated by measuring the difference in the value of the companies’ preferred and common shares between Friday, Sept. 5, 2008, and the following Monday, the first day of trading after the government takeover.
Those differences totaled more than $25.9 billion for Fannie Mae and more than $15.6 billion for Freddie Mac, according to the complaint.
Paulsen, Perry
Hedge funds including Paulson & Co. and Perry Capital, which have invested in the preferred shares, have been lobbying Congress to consider allowing Fannie Mae and Freddie Mac to become independent again. Republican and Democratic lawmakers and President Barack Obama have called for both companies to be liquidated.
“It’s probably dawning on some of these investors that the political branches of government aren’t going to provide them with any relief,” said Jeb Mason, a partner at The Cypress Group, an investment consulting and research firm based in Washington. “The courts are sort of left as the one potential avenue for success.”
Plaintiffs in the case include Washington Federal (WAFD), a Seattle bank, the city of Austin, Texas, Police Retirement System and Michael McCredy Baker, who is identified as an individual shareholder.
Sampson Jordan, the chief executive officer for Austin’s $552 million Police Retirement System, didn’t immediately return a call yesterday seeking a comment on the complaint.
The case is is Washington Federal v. U.S., 13-cv-00385, U.S. Court of Federal Claims (Washington).
To contact the reporters on this story: Andrew Zajac in Washington at azajac@bloomberg.net; Clea Benson in Washington at cbenson20@bloomberg.net
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Maura Reynolds at mreynolds34@bloomberg.net
NEWS!!!: FHFA Annual Report to Congress, June 13, 2013. Some good news and heavy reading:
http://www.fhfa.gov/webfiles/25320/FHFA2012_AnnualReport.pdf
The FHFA's outlook on the future.
“Today, the government touches more than 9 out of every 10 mortgages. With this in mind, it is essential that FHFA help transition the mortgage market to a more secure, sustainable, and competitive model. The conservatorships of Fannie Mae and Freddie Mac were never intended to be long-term solutions.
It is vital to the lasting health of our country’s housing and financial markets that our elected leaders work to bring the conservatorships to a conclusion and define the government’s role and requirements for housing finance in the future. The steps we are taking to move forward on conservatorship strategic plan in 2013 should help to set the stage for whatever transition policymakers choose. Since Fannie Mae and Freddie Mac were placed into conservatorship, we have made major strides towards rehabilitating the mortgage market and keeping borrowers in their homes, but there is still much to be done.
The nation will need a healthy and efficient secondary mortgage market regardless of the final resolution of the conservatorships. That is why we continue to move forward with the framework we began in 2012—one that will work for the Enterprises now and in the future. We seek to establish a framework that can support the secondary mortgage market after conservatorship, with or without government involvement, and attract more private capital to the market.”
I see no mention of a wind-down. In fact, the FHFA talks extensively about building a secondary enterprise separate from Fannie/Freddie that would operate independently of them (but nothing of that secondary enterprise replacing them entirely).
I hope so. I want to see this in the $6 and up range.
I don't think you have to wait that long. The next earning is just around the corner. I believe this will start moving up a week or two before earnings is release. If earnings is even better that the first quarter than we will test $4 and $5 again.
This was posted 4 hours ago in the news section within ihub.
U.S. Mortgage Rates Rose Further in Latest Week
Average mortgage rates in the U.S. mostly rose for the sixth straight week amid a solid May jobs report, but since they are coming back from record lows they continue to help keep home affordability high, according to Freddie Mac (FMCC).
The 30-year fixed rate has risen more than half a percentage point since beginning to bounce back last month, according to the mortgage-finance company.
For the week ended Thursday, the 30-year fixed-rate mortgage averaged 3.98%, compared with 3.91% the previous week and 3.71% a year earlier. Rates on 15-year fixed-rate mortgages averaged 3.1%, versus 3.03% a week earlier and 2.98% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, averaged 2.79%, compared with 2.74% the previous week and 2.8% a year earlier. One-year Treasury-indexed ARM rates averaged 2.58%, unchanged from the previous week and compared to 2.78% the year earlier.
Write to Tess Stynes at tess.stynes@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
Fannie Mae See U.S. Growth at 2.1% for 2013
U.S. economic growth is expected to slowly but consistently strengthen into 2014, as fiscal headwinds continue to wane, Fannie Mae (FNMA) said in a recent report.
Still, those fiscal headwinds should keep growth to below 2% for the first half of 2013. Growth should continue to move positively amid an ongoing recovery in housing, rising household wealth and expanded energy production, the mortgage-finance company said.
"At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed, " said Fannie Mae Chief Economist Doug Duncan.
He added that the economy is on course to grow 2.1% this year--unchanged from its March estimate and up from the anemic pace of 1.7% in 2012. The rise is consistent with the incremental improvement seen in the past few years but still below the economy's potential, Mr. Duncan said.
Fannie Mae's forecast calls for 2.5% growth in 2014, helped largely by the strengthening housing market.
Housing was largely positive entering the spring/summer season, with indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinancing originations, potential home buyers are still able to find affordable markets, Fannie Mae said.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
Right now 2339 people signed. People are signing up every min.
I just saw that. People are signing it pretty fast.
https://petitions.whitehouse.gov/petition/restore-fairness-fannie-mae-and-freddie-mac-common-shareholders/vYQfrKHP
This was $87 in 2001. We are only a fraction of what it was. I think we've seen the bottom. Next week will be pretty interesting.
It looks like people are buying again. It looks like it will gap up green tomorrow. :)
It looks like people are buying again. It looks like it will gap up green tomorrow. :)
Moving back up pretty nicely
Moving back up pretty nicely
You have to have a stomach of steel to hold your shares. Still holding and added at the same time.
You have to have a stomach of steel to hold your shares. Still holding and added at the same time.
Time for me to get back in on the bounce. :)
Time for me to get back in on the bounce. :)
This thing is moving like crazy. I think it will be green after all of the day traders are done.
This thing is moving like crazy. I think it will be green after all of the day traders are done.
Shaking the tree a little before running back up. this will go higher with the great news from Citi bank.
Shaking the tree a little before running back up. this will go higher with the great news from Citi bank.
Going to bounce back up soon! Still too early in the day.
Going to bounce back up soon! Still too early in the day.
Going to bounce back up soon! Still too early in the day.
Crazy bounce. This this is too strong!
Shorty is getting crush again. Going higher and higher!
Shorty is getting crush again. Going higher and higher!
$4 is just around the corner. It looks like it will get to $5 this week.
$4 is just around the corner. It looks like it will get to $5 this week.