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Incorrect, for years freddie and fannie were valued high when people thought they didn't have a government guarantee. It wasn't until the crisis where the whole idea of a government guarantee came to be because they were "too big to fail" (hence the implicit gov't guarantee).
I wasn't trying to imply conservatorship was coming to an end. I was simply implying that they knew where the future of the companies were headed, contradicting what they put in their motion to dismiss discovery... I certainly am not trying to get you excited ;)
I have publicly stated numerous times that the conservatorships of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) were never intended to be a long-term solution.
Fannie Mae, Freddie Mac Hangs In Balance As Mel Watt Takes Helm
by VW StaffMarch 24, 2014, 10:17 pm
Federal Housing Finance Agency Announces Departure of Edward J. DeMarco, and Mel Watt takes the helm as fate of Fannie Mae, Freddie Mac hangs in the balance. The press release can be found below
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Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) news at FHFA (via FHFA.Gov). Press relase below
Federal Housing Finance Agency Announces Departure of Edward J. DeMarco
The Federal Housing Finance Agency (FHFA) today announced that Edward J. DeMarco will depart the Agency at the end of April.
DeMarco, who served as Acting Director of the Agency from 2009 until January, 2014, submitted a letter confirming his departure date to Federal Housing Finance Agency Director Melvin L. Watt. He has made no announcements about his future plans.
“Ed has been an invaluable asset to FHFA and I appreciate his assistance to me during this transitional period,” said Watt. “Throughout his 28 year career as a public servant he has made many important public policy contributions grounded in his strong background in housing finance. I wish him the very best in his future endeavors.”
DeMarco joined the Office of Federal Housing Enterprise Oversight (OFHEO), a predecessor Agency to FHFA, in October of 2006 as its Chief Operating Officer and Deputy Director. He was appointed Acting Director of FHFA on August 25, 2009 by President Obama and served in that role until Director Watt was sworn in on January 6, 2014. Previously, DeMarco served in various capacities at the Social Security Administration, U.S. Department of the Treasury and U.S. General Accounting Office.
A copy of Mr. DeMarco’s letter about Fannie Mae, Freddie Mac is attached.
###
The Federal Housing Finance Agency regulates Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.5 trillion in funding for the U.S. mortgage markets and financial institutions.
Fannie Mae, Freddie Mac crapo bill summary
Fannie Mae, Freddie Mac crapo bill summary
Fannie Mae, Freddie Mac March 24, 2014
Mr. Melvin L. Watt
Director
Federal Housing Finance Agency
400 7th Street, SW
Washington, DC 20024
Dear Director Watt:
I am writing to confirm the date of my departure from the Federal Housing Finance Agency will be on or about April 30, 2014.
I appreciate your invitation to assist you with the recent leadership transition and I have been pleased to do so. I am also grateful for the thoughtfulness you have shown me during this transition period. With the transition now well along, I believe the time has come for me to seek other opportunities.
FHFA has existed for less than six years and during that time has faced enormous challenges that required balancing multiple legal and policy requirements and goals. We have responded to the urgent need of families facing difficulties, the fragility of the housing markets, and the enormous demands placed on taxpayers. We also built a new agency during this period. Whatever the future holds, the country needs an agency expert in the workings of our housing finance system and I am proud that FHFA has developed the capabilities to take on that responsibility.
I have publicly stated numerous times that the conservatorships of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) were never intended to be a long-term solution. Congress must act to bring the conservatorships to an end and chart the course for a new structure for housing finance. My earnest hope is that recent legislative initiatives in the House and the Senate lead to the consensus needed to bring such legislation to enactment.
It has been an honor and a privilege to serve my country at FHFA and throughout my 28 year career as a federal employee. I wish you and the outstanding career staff at FHFA continued success in carrying out FHFA’s mission.
Yours truly,
/s/
Edward J. DeMarco
http://www.valuewalk.com/2014/03/fannie-mae-freddie-mac-mel-watt/
Agreed
So strange how Freddie Mac leads in pps all day and in the last 5 minutes freddie drops and fannie pops to finish the week with fannie ahead. Anyone find this price correlation strange?
so in layman's terms.... the case Theodore Olsen and crew are presenting is tough to argue
You know Crapo and Johnson ;)
oh, so what exactly do they do on Friday? Should both be considered something to look forward to?
? So what about Thursday? I'm a little confused. It says Friday?
Isn't it march 21st? ie, Friday? http://www.restorefanniemae.us/calendar
Why Thursday?
Appreciated, thanks
Obit is there any real reason for the sudden huge decline in pps? If you had to list reasons what would they be?
Did the GAP get filled?
Honestly I have to give you that one lol
Somebody wants shares at 3.125!
No I don't remember last year because it was LAST YEAR
Because he's comparing it with last May.
but are you right about this being the last time we see 3s? ;)
THANK YOU lol ridiculous to think of that as a gap
Lunch time lulzzz
I love watching the real time quotes on this stock, just fascinating to me
Bloomberg News
Fannie Mae Liquidation Seen Sparing Preferred Holders
By Jody Shenn March 13, 2014
Fannie Mae Liquidation Seen Sparing Preferred Holders
An advertisement for mortgage broker Freddie Mac during the Mortgage Banker's Association Conference. Photographer: Justin Sullivan/Getty Images
Winding down Fannie Mae and Freddie Mac wouldn’t necessarily wipe out all of their shares.
Senate banking committee leaders announced this week they plan to introduce a bill to dismantle the two mortgage companies. The government seized them in 2008 after they helped fuel the worst financial crisis since the Great Depression. Common shares (FNMA:US) of the two firms plunged 34 percent this week through yesterday. Preferreds fell 11 percent.
Preferred stock in the companies, which rose fivefold over the past year, could recoup its full value even in a liquidation if the government or the courts reverse a measure that mandates all of their profits go to taxpayers, said Jeffrey Lewis at TIG Advisors LLC. Investors in common shares are betting that Fannie Mae (FNMA:US) and Freddie Mac would also be allowed to become private companies again and continue to dominate the market, he said.
VIDEO: Crapo: ‘Good Chance’ Housing Revamp Bill Will Pass
“It’s hard to find any reasonable outcome that’s really terrible for the preferreds, given what I perceive to be the value of the business (FNMA:US) that’s already there,” said Lewis, a senior portfolio manager at TIG, who helps manage about $400 million, and began buying the preferred shares last year.
The planned legislation, drafted with input from President Barack Obama’s administration, would replace Fannie Mae and Freddie Mac with a U.S.-backed mortgage-bond insurer that would cover losses only after private capital bears the first 10 percent, Senate Banking Committee Chairman Tim Johnson and Senator Mike Crapo said in a March 12 statement.
Corker-Warner Bill
The announcement by Johnson, a Democrat, and Crapo, a Republican, didn’t address how investors in the companies, including hedge funds Pershing Square Capital Management LP and Perry Capital LLC and mutual-fund manager Fairholme Capital Management LLC, would be treated. They said their legislation would be based on a Senate bill introduced last year by Republican Bob Corker and Democrat Mark Warner.
“The answer to that question is going to come in court rather in Congress,” Crapo said today in a Bloomberg Television interview. “They have filed suit right now in order to challenge the way the current conservatorship is managing the current profitability of Fannie Mae and Freddie Mac and we are not necessarily going to dictate the outcome of that. That will be a decision that’s made in the courts.”
Any wind down of Fannie Mae and Freddie Mac would have to address whether the companies’ values -- from the loans and bonds on their balance sheets to income from their existing guarantees on about $4 trillion of securities -- is split up among several stakeholders or left for taxpayers.
The companies have sent the Treasury Department $203 billion since turning profitable in 2012. The government is still owed about $188 billion for its bailout funding, because federal regulators adopted a policy that payments to the government would not be counted as repaying the aid.
Courts Decide
Corker, among the staunchest Congressional opponents to rewarding shareholders, has also said that the courts should decide whether that rule should be overturned.
“I have always believed that reform needs to ensure that all assets are disposed of in a legally sound manner, but my view that these shareholders likely won’t get a dime has not changed -- except possibly for small remnants, if there are any left, once reform is finished,” he said in a January e-mail.
Warner, a former venture capitalist, said in January that taxpayers should earn a return that reflects the size of the risk the government took by stepping in during a crisis.
Preferred shareholders (FNMA:US) hold notes with a face value of more than $33 billion. Common shareholders, including the government, through its option to take an 80 percent stake, are holding paper that traded at prices this week that pushed the companies’ combined market value to more than $55 billion, before crashing.
Ackman’s Gains
The slump reduced gains byBill Ackman’s Pershing Square on the stock from more than $700 million at the peak on March 11 to about $220 million yesterday, according to disclosures about the 10 percent of the outstanding shares he bought starting in October and data compiled by Bloomberg.
Fannie Mae’s common shares (FNMA:US) rose 6.9 percent today to close at $3.79, after falling yesterday to $3.54 from $5.82 on March 10. The stock is up from 29 cents a year ago. One of its preferred issues with a face value of $25 fell 5.5 percent to $10.30, compared with $12.70 on March 6 and $2.08 a year earlier.
What about now?
Thanks, appreciated glty as well.
I sold today after holding since the low in august. Just turned 21 last year, this is the most money I've ever had haha, prolly not anything compared to most though. Still long and waiting for a new buying opportunity.
I like the PSAR and still believe in fannie (will never leave this beautiful slut) but first I think we consolidate for a couple weeks just as we did previously. What do you think? Time to consolidate?
The only one that is important, the one that holds the golden ratio, the one that makes the magical musical note Phi :) 61.803
It got drowned out though. I believe it's time to consolidate for a couple weeks then we resume. Fib level is at 2.97, Cramer said they need to cool off and every news source is writing there heads off about the Johnson crapo bill. I still believe fnma will be restored, I just think there's too much negative press currently. Plus PSAR flipped as well which usually tells the direction of the graph
Fib level @ 2.97
Cramer talking about fnma and fmcc on mad money
Target price? Thinking $2 range as well?
Go BAC!
I'm not sure it will break $5 with all this money
Been hearing that for a while now. I'm waiting till RSI hits 90 to see a downward turn. Imo
Think in dollar volume rather then just volume imo. Still ~100million dollars being traded
Uhh didn't the US use the point they couldn't tell the future profitability of the companies in their rebuttal to the discovery by fairholme?