RestoreFannieMae.us
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
We put it on ours! www.restorefanniemae.us
***FHFA seeks input on GSE reform***
Public given opportunity to voice concerns
Make sure you send all of your suggestions to: multifamilypolicyissues@fhfa.gov
http://www.fhfa.gov/webfiles/25420/MultifamilyInput080913Final.pdf
Reid Objects to Obama's GSE Plans, Throwing Wrench into Housing Debate
by VICTORIA FINKLE and DONNA BORAK
AUG 12, 2013 3:30pm ET
http://www.americanbanker.com/issues/178_155/reid-objects-to-obamas-gse-plans-throwing-wrench-into-housing-debate-1061270-1.html?zkPrintable=1&nopagination=1
WASHINGTON — Senate Majority Leader Harry Reid's surprise criticism of President Obama’s plan to unwind Fannie Mae and Freddie Mac has upset the conventional wisdom surrounding housing finance reform.
In a little-noticed interview with Nevada's public radio station KNPR late last week, the Nevada Democrat objected to calls to eliminate the government-sponsored enterprises, suggesting that doing so could make it harder for people to buy homes.
"The president said just a few days ago we are going to have to take a look at Fannie and Freddie, these are the government organizations that have made homeownership so easy. I don't agree with the president," Reid said. "He says he wants to get rid of them. I think we'd better be very, very careful in doing that. I will look closely at his recommendations because on their face, I don't like them."
The comments raised doubts about how fast the Senate could move on a bipartisan housing finance reform bill that includes the dissolution of Fannie and Freddie. That plan was publicly embraced by President Obama last week and has been gaining momentum among Senate lawmakers.
"It felt like one of the strings of consensus in the GSE reform debate was the liquidation of GSEs as we know it, so this statement in and of itself causes us to reconsider whether that is truly a point of agreement on Capitol Hill," said Isaac Boltansky, a policy analyst at Compass Point Research & Trading, who drew attention to Reid's statements in a note to clients on Monday.
Obama laid out broad principles for GSE reform in a major housing address last week, calling a plan by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., "pretty consistent" with his own views. The Corker-Warner bill, which has attracted bipartisan support from several members of the Senate Banking Committee, would replace the GSEs with a largely private market backed by a catastrophic government guarantee. Senate Banking Committee Chairman Tim Johnson, D-S.D., and Sen. Mike Crapo of Idaho, the top Republican on the panel, have indicated they will take up GSE reform when Congress returns from recess in September, and will likely borrow from the Corker-Warner bill and other proposals.
Reid said during his radio interview on Friday that he is open to making big changes at the GSEs, a position that may resonate with some Democrats who are uncomfortable with jettisoning Fannie Mae and Freddie Mac altogether.
"I have no problem looking at them, revising, revamping, but I think getting rid of them is not a great thing to do," Reid said.
A spokesman for the lawmaker did not respond to a request for further comment on Monday.
But whether there are other Democrats who will jump up to defend Reid's position remains to be seen. His remarks come as Sen. Jack Reed, who has long been rumored to be working on his own mortgage finance reform plan to potentially recapitalize the GSEs, now appears to be throwing his support behind the existing efforts underway on the banking panel.
"Senator Reed is very interested in finding a way to eliminate the GSEs and preserve mortgage financing for the middle-class, but he believes the best way to achieve this goal is for Chairman Johnson and Ranking Member Crapo to continue working together and leading on this issue," said Chip Unruh, Reed's spokesman, in an e-mail to American Banker on Monday.
Reid's comments also illustrate some of the remaining difficulties for lawmakers as they work to advance housing finance reform this year. Even as key players show support for broad outlines of a shared plan, there are many stakeholders left on both sides of the political aisle who haven't yet weighed in.
Moreover, if lawmakers advance a bill through the committee and onto the floor of the Senate, they will still need to negotiate with the House. The House Financial Services Committee passed a plan, co-authored by chairman Jeb Hensarling, R-Tex., last month that would unwind Fannie and Freddie and provide no government guarantee in the housing market.
"It's one thing to compare the position of Corker-Warner to the Hensarling bill and try to find common ground," said Edward Mills, a financial policy analyst at FBR Capital Markets and former Hill aide. "But this kind of position by Sen. Harry Reid moves things a little more toward the left, making it harder to find common ground between the Senate position and the House position."
Reid's comments are also a reminder of how much influence the Senate majority leader will have on any housing finance reform package.
"The power the majority leader has in making that decision is something that any majority leader regardless of how close or how far apart from the president will always protect," Mills added. "As the majority leader, he has a tremendous amount of sway over this debate, and he hasn't really weighed in on it yet."
Some observers, meanwhile, remained more skeptical about the impact that Reid's comments will have on the larger debate. Taken in context, his move could represent more of an opportunity to differentiate himself from the White House than an attempt to stake out a strongly held policy position.
"It didn't cost Sen. Reid anything to pick an instance where he could distinguish himself from the president's position," said Boltansky, noting that the question about GSEs followed a long back-and-forth with the radio host in which Reid stood in support of Obama's health care legislation. "It didn't hurt him to choose something where he could disagree with the president without really impacting the debate more broadly."
Others noted that the broader discussion over housing finance reform is still developing and may continue to evolve for the foreseeable future.
"I still take it with a grain of salt," said Brian Gardner, an analyst at Keefe, Bruyette & Woods, of Reid's comments. "I don't see any lines in the sand here. I think this is an evolving debate and I don't see this as being telling that one outcome is more likely than another. I think this reinforces my view and the view of others that is going to be a very long debate."
Gardner predicted that when Johnson and Crapo begin to make further progress on a mortgage finance bill, Reid will probably take a much closer look at specific legislative proposals.
Here's the link: http://seekingalpha.com/currents/post/1216212
Freddie Mac spends fortune to prop up market share
Never underestimate the power of a large bureaucracy trying to sustain itself. Freddie Mac (FMCC.OB) is spending hundreds of millions per year to hold onto market share instead of sending the money to the Treasury, reports the FT.
The money is going to lenders as compensation payments to make up for the fact that Freddie's MBS trade at a lower price than those of Fannie Mae (FNMA.OB). Deutshce Bank estimates it's totaled more than $2B since 2008 and Treasury is demanding changes which would unify the securities of the two GSEs. Fund managers - often limited in the amount of money they can allocated to a single security - have longed balked at the idea.
Despite the payments, Freddie's market share has declined to the low 30s from its long-term average of 40%.
Awesome!
Great article Blue!
*********THE NEW VIDEO*********
http://www.zerohedge.com/news/2013-08-07/obama-hope-and-change-housings-hhmm-reality
From Obama 'Hope-And-Change' To Housing's 'Hhmm' Reality
Submitted by Mark J. Grant, author of Out of the Box,
President Obama said yesterday that he wouldn't support restoring FNMA and Freddie Mac to the status they enjoyed before the credit crisis, which let Fannie and Freddie make profits during good times, "knowing that if their bets went bad, taxpayers would be left holding the bag," the president said in remarks at a Phoenix, Arizona high school. "It was 'heads we win, tails you lose,' and it was wrong."
In my opinion this was a game changing speech. The implications loom large not just for property owners but for investors if there will not be any "implicitly guaranteed" Agencies. For home owners it is likely to mean that their cost of mortgage products will rise and perhaps significantly if this task is left totally to the private sector. I suspect that in times of trouble then no one will lend and the volatility in the housing sector will increase dramatically.
If some new Government Sponsored Enterprise (GSE) is going to back-stop mortgages then their debt will be added to the national debt like the debt of GNMA now so that America's debt to GDP ratio will be impacted negatively. Perhaps, though, this new Agency will just guarantee certain types of mortgages and there will be no issuance of debt which will be problematic for the bond markets. With the Treasury indicating that new issuance will be down about 31% and the Fed monetizing about 52% of all newly issued government/agency debt now there could well be an extreme shortage of available bonds. Prices may sky rocket once again and yields fall as demand, much of which is being forced by the Fed's current policies, far outstrips supply.
Then there is the question of what banks may be allowed to invest in which would change the dynamics not just of their portfolios but of their financial risk position. Is it to be that they can only buy Treasuries then or will it be that certain types of corporate bonds or private mortgage backed-bonds will be allowed? There is a can of worms in this answer without doubt.
Then there is the question of their preferred stock. One of the largest blunders, in my opinion, during the 2008/2009 financial crisis, was to stop paying the dividends on these securities. Not only did it cause huge financial harm for many banks, especially community banks, but it called into question the value of the "implicit guarantee" of the country. While whether it was legally correct is still in contention the moral compass decision, in my opinion, was just very wrong. In any event one wonders what the brilliant minds in Congress will do with this issue when called to task.
The possible lack of issuance may well change the functioning of the fixed income markets in a very real manner. It could cause a huge amount of compression against Treasuries in all the other sectors. Spreads may compress past anything than we have seen before as the lack of available bonds decreases by large margins. With the Fed handing out newly created money like there is no tomorrow; the results could be disturbing.
I leave you with one final thought this morning. Many Municipal bonds are now yielding, for only the second time in recent years, more than their relatively rated corporate bonds. I suggest you not only take notice of this but make a change in your strategy to account for this opportunity. It will not last long in my view and the play should prove to be beneficial.
For comprehensive Due Diligence, regarding Fannie Mae & Freddie Mac, go to: http://www.restorefanniemae.us
Learn More about Freddie Mac's Commitment at: http://www.restorefanniemae.us/rely
Freddie Mac Logs $5 Billion Profit
August 7, 2013, 9:42 a.m.
By NICK TIMIRAOS And SAABIRA CHAUDHURI
Freddie Mac FMCC reported a $5 billion profit during the second quarter, the second-largest quarterly profit in the company's history and the latest reminder of how surging profits at Freddie and its larger sibling, Fannie Mae, FNMA could reshape the debate over the firms' futures.
The second-quarter earnings compare with a year-earlier gain of $3 billion and marked the seventh straight profit for the mortgage-finance company. Rising home prices, falling mortgage delinquencies, and higher loan fees have marked a sharp turnaround from a four-year period in which the company suffered heavy losses that forced it to seek massive infusions from the U.S. Treasury.
"Clearly our outstanding financial results continue to benefit from the turnaround in the housing markets as well as from our work to minimize losses and build a strong new book of business," said Donald Layton, Freddie's chief executive.
Freddie said it will make a $4.4 billion dividend payment to the U.S. Treasury.
While the company isn't allowed to pay off the $71 billion in bailout money it received beginning five years ago, the latest payment will bring to $41 billion the amount of dividends it will have returned to the Treasury, leaving its net cost to taxpayers at around $30 billion.
At the current pace, Freddie stands to pay back more in dividends than it has drawn by early 2015. The company also has yet to claim certain tax benefits worth as much as $29 billion that could lead to a large one-time payment to the Treasury. Mr. Layton said that if recent positive trends continued, the company could reverse the write-downs of those tax assets over the next two quarters.
Freddie has returned to profitability in large part because it has sharply tightened its lending standards, meaning that riskier loans from the housing bubble are being replaced with much safer mortgages. But the company is required by its regulator to shrink its huge mortgage portfolio, which typically accounts for an outsize share of its net income. The upshot is that Freddie's and Fannie's biggest profit engine will shrink over the next few years, which could one day curb recent record profits.
The fact that Fannie and Freddie are throwing off large profits, nearly all of which are being swept away by the Treasury, could reshape the debate over how and when to restructure the firms, which were taken over by the government in 2008 through a legal process known as conservatorship.
On Tuesday, President Barack Obama called for replacing Fannie Mae and Freddie Mac with a new system of guaranteeing certain mortgages in order to preserve widespread access to long-term, fixed-rate mortgages. Those loans remain unique in the U.S. and the White House said it would support some kind of permanent but limited federal backstop to keep them widely available to middle-class consumers.
The cost of the government's bailouts of Fannie and Freddie have fallen amid the housing market's revival and following changes made at the beginning of the year to force the companies to send almost all of their profits to the Treasury as dividend payments.
The bailout tab for both companies has declined to about $51 billion from a high of $151 billion at the end of 2011.
Write to Nick Timiraos at nick.timiraos@wsj.com and Saabira Chaudhuri at saabira.chaudhuri@wsj.com
http://online.wsj.com/article/SB10001424127887324522504578653820200448626.html
***Please take the Fannie Mae & Freddie Mac Favorability Survey at:
http://www.restorefanniemae.us/survey
Follow us on twitter: @RestoreFannie
Text of Obama Speech on Homeownership
August 6, 2013, 4:02 PM
The following are President Barack Obama‘s remarks on responsible homeownership, as prepared for delivery on Aug. 6 in Phoenix, Ariz.:
http://blogs.wsj.com/washwire/2013/08/06/text-of-obama-speech-on-homeownership/
Over the past couple weeks, I’ve been visiting towns like this talking about what we need to do as a country to secure a better bargain for the middle class – a national strategy to make sure everyone who works hard has a chance to succeed in the 21st century economy.
For the past four and a half years, we’ve been fighting our way back from a devastating recession that cost millions of Americans their jobs, their homes, and their savings – a recession that laid bare the long erosion of middle-class security.
Together, we took on a broken health care system and a housing market in freefall. We invested in new American technologies to reverse our addiction to foreign oil. We changed a tax code that had become tilted in favor of the wealthiest at the expense of working families. We saved the auto industry, and now GM plans to hire 1,000 new workers right next door in Chandler to make sure we build some of the most high-tech cars in the world right here in America.
Today, our businesses have created 7.3 million new jobs over the last 41 months. We now sell more products made in America to the rest of the world than ever before. We produce more renewable energy than ever, and more natural gas than anyone. Health care costs are growing at the slowest rate in 50 years. And our deficits are falling at the fastest rate in 60 years.
Thanks to the grit and resilience of the American people, we’ve cleared away the rubble from the financial crisis, and begun to lay a new foundation for stronger, more durable economic growth. But as any middle-class family will tell you, we’re not where we need to be yet. Even before the crisis hit, we were living through a decade where a few at the top were doing better and better, while most families were working harder and harder just to get by.
Reversing this trend must be Washington’s highest priority. It’s certainly my highest priority. But for most of this year, an endless parade of distractions, political posturing, and phony scandals have shifted focus from what we need to do to shore up the middle class. And as Washington heads towards another budget debate, the stakes could not be higher.
That’s why I’m laying out my ideas for how we must build on the cornerstones of what it means to be middle class in America. A good job with good wages. A home to call your own. A good education. Affordable health care that’s there for you when you get sick. A secure retirement even if you’re not rich. And more chances for folks to earn their way into the middle class as long as they’re willing to work for it.
Last Tuesday, I went to Tennessee to talk about that first cornerstone, and lay out a grand bargain for middle-class jobs. And today, I’ve come to Phoenix to talk about that second, most tangible cornerstone at the heart of middle-class life: the chance to own your own home.
A home is supposed to be our ultimate evidence that in America, hard work pays off, and responsibility is rewarded. I think of my grandparents’ generation. After my grandfather served in World War II, this country gave him the chance to go to college on the GI Bill, and buy his first home with a loan from the FHA. To him, and to generations of Americans before and since, a home was more than just a house. A home was a source of pride and security. It was a place to raise children, put down roots, and build up savings for college, or a business, or retirement. And buying a home required responsibility on everyone’s part – banks were supposed to give you a fair deal, with terms you could understand, and buyers were supposed to live within their means. In my grandfather’s America, houses weren’t for flipping – they were for living in.
But over time, responsibility too often gave way to recklessness – on the part of lenders who sold loans to people who couldn’t afford them, and buyers who knew they couldn’t afford them. And when the housing bubble burst, triggering the recession, millions of Americans who had done everything right were hurt badly by the actions of others. By the time I took office, home values had fallen almost 20% from the year before. New housing starts had fallen nearly 80% from their peak. Hundreds of thousands of construction workers had lost their jobs. A record number of people were behind on their mortgages. And the storm hit harder here in Phoenix than almost anywhere.
So less than a month after I took office, I came here to Arizona and laid out steps to stabilize the housing market and help responsible homeowners get back on their feet. And while it’s been a long, slow process that’s taken longer than any of us would like, we’ve helped millions of Americans save an average of $3,000 each year by refinancing at lower rates, and we’ve helped millions of responsible homeowners stay in their homes.
And where Congress wouldn’t act, we did. Over the past few years, the Department of Justice stood up for buyers who were discriminated against or conned by predatory lenders, winning more money for victims of discrimination last year alone than in the previous 23 combined. We worked with states to force big banks to repay more than $50 billion dollars to more than 1.5 million families – the largest lending settlement in history. We’ve extended the time folks who’ve lost their jobs can delay payments on their mortgages while they keep looking for work. And we’ve cracked down on the bad practices that led to the crisis in the first place – because if something is called a “liar’s loan,” it’s probably a bad idea.
Today, our housing market is healing. Home prices are rising at the fastest pace in 7 years. Sales are up nearly 50%. Construction is up nearly 75%. New foreclosures are down by nearly two-thirds. Millions of families have been able to come up for air, because they’re no longer underwater on their mortgages. And even though we’re not where we were need to be yet, Phoenix has led one of the biggest comebacks in the country. Home prices have risen by nearly 20% over the last year. New home sales are up by more than 25%. A company I visited this morning, Erickson Construction, shrank to less than 100 workers during the worst years of the crisis. Today they employ 580 people – and they’re hiring even more.
Now we have to build on this progress. We give to more hard-working Americans the chance to buy their first home. We have to help more responsible homeowners refinance their mortgage. And above all, we have to turn the page on the bubble-and-bust mentality that created this mess, and build a housing system that’s durable and fair and rewards responsibility for generations to come.
Some of the ideas I put forward today will be new. Some will be old ideas Congress hasn’t acted on yet. But like the other actions we’ve taken, these will not help the neighbors down the street who bought a house they couldn’t afford, then walked away and left a foreclosed home behind. It won’t help speculators who bought multiple homes just to make a quick buck.
What these ideas will do is help millions of responsible, middle-class homeowners who still need relief, and working Americans who dream of owning their own home fair and square. And there are immediate actions we can take, right now, that would make a difference.
Step one is for Congress to pass a good, bipartisan idea, and allow every homeowner to save thousands of dollars a year by refinancing their mortgage at today’s rates. Let’s get that done.
Step two: now that we’ve made it harder for reckless buyers to buy homes they can’t afford, let’s make it easier for qualified buyers to buy homes they can. We should simplify overlapping regulations and cut red tape for responsible families who want to get a mortgage, but who keep getting rejected by banks. And we should give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they’ve worked hard to repair their credit.
Step three is something you don’t always hear about when it comes to the housing market – and that’s fixing a broken immigration system. It’s pretty simple: when more people buy homes, and play by the rules, home values go up for everybody. According to one recent study, the average homeowner has already seen the value of their home boosted by thousands of dollars, just because of immigration. Now, with the help of your Senators, John McCain and Jeff Flake, the Senate has already passed a bipartisan immigration bill that’s got the support of CEOs, labor, and law enforcement. And considering what this bill can do for homeowners, that’s just one more reason Republicans in the House should stop dragging their feet and get this done.
Step four: we should address the uneven recovery by rebuilding the communities hit hardest by the housing crisis, including many right here in Arizona. Let’s put construction workers back to work repairing rundown homes and tearing down vacant properties. Places facing a longer road back from the crisis should have their country’s help to get there.
Step five: we should make sure families that don’t want to buy a home, or can’t yet afford to buy one, have a decent place to rent. In the run-up to the crisis, banks and the government too often made everyone feel like they had to own a home, even if they weren’t ready. That’s a mistake we shouldn’t repeat. Instead, let’s invest in affordable rental housing. And let’s bring together cities and states to address local barriers that drive up rent for working families.
Helping more Americans refinance. Helping qualified families get a mortgage. Reforming our immigration system. Rebuilding the hardest-hit communities. Making sure folks have a decent place to rent. These steps will give more middle-class families the chance to buy their own home, more relief to responsible homeowners, and more options for families who aren’t yet ready to buy. But as home prices rise, we can’t just re-inflate a housing bubble. That’s the second thing I’m here to talk about today: laying a rock-solid foundation to make sure the kind of crisis we just went through never happens again.
That begins with winding down the companies known as Fannie Mae and Freddie Mac. For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was “heads we win, tails you lose.” And it was wrong.
The good news is that there’s a bipartisan group of Senators working to end Fannie and Freddie as we know them. I support these kinds of efforts, and today I want to lay out four core principles for what I believe this reform should look like.
First, private capital should take a bigger role in the mortgage market. I know that must sound confusing to the folks who call me a raging socialist every day. But just like the health care law that set clear rules for insurance companies to protect consumers and make it more affordable for millions to buy coverage on the private market, I believe that while our housing system must have a limited government role, private lending should be the backbone of the housing market, including community-based lenders who view their borrowers not as a number, but as a neighbor.
Second, no more leaving taxpayers on the hook for irresponsibility or bad decisions. We encourage the pursuit of profit – but the era of expecting a bailout after your pursuit of profit puts the whole country at risk is over.
Third, we should preserve access to safe and simple mortgage products like the 30-year, fixed-rate mortgage. That’s something families should be able to rely on when they make the most important purchase of their lives.
Fourth, we have to keep housing affordable for first-time homebuyers and families working to climb into the middle class. We need to strengthen the FHA so it gives today’s families the same kind of chance it gave my grandparents, and preserves that rung on the ladder of opportunity. And we need to support affordable rental housing and keep up our fight against homelessness. Since I took office we’ve helped bring one in four homeless veterans off the streets. Here in Phoenix, thanks to the hard work of everyone from Mayor Stanton to the local United Way to US Airways, you’re on track to end chronic homelessness for veterans by 2014. But we have to keep going, because nobody in America, and certainly no veteran, should be left to live on the street.
Putting these principles in place will protect our entire economy, but we also need to do more to give individual homeowners the tools they need to protect themselves. The Consumer Financial Protection Bureau we created is laying down new rules of the road that every family can count on when they’re shopping for a mortgage. They’re designing a new, simple mortgage form in plain English, with no fine print, so you know before you owe. And I’m glad the Senate finally confirmed Richard Cordray as the head watchdog at the CFPB, so he can aggressively protect homeowners and consumers.
But when it comes to some of the other leaders we need to look out for the American people, the Senate still has to do its job. Months ago, I nominated a man named Mel Watt to be our nation’s top housing regulator. Mel’s represented the people of North Carolina in Congress for 20 years, and in that time, he worked with banks and borrowers to protect consumers and help responsible lenders provide credit. He’s the right person for the job, and Congress should give his nomination an up-or-down vote without any more obstruction or delay.
Now I want to be clear: no program or policy will solve all the problems in a multi-trillion dollar housing market. The heights the housing bubble reached before it burst were unsustainable, and it will take time to fully recover. But if we take the steps I put forward today, then I know we will restore not just our home values, but our common values. We’ll make owning a home a symbol of responsibility and a source of security for generations to come, just like it was for my grandparents, and just like I want it to be for our grandchildren.
And if we follow the strategy I am laying out for our entire economy: for jobs, housing, education, healthcare, retirement, and climbing the ladders of opportunity, then I have no doubt we will secure that better bargain where hard work is once again rewarded with a shot at a middle-class life. More Americans will know the pride of that first paycheck. More will know the satisfaction of flipping the sign to “Open” on their own business. More will know the joy of etching a child’s height into the door of their new home.
We can do all this if we work together. It won’t be easy, but if we’re willing to take a few bold steps – and if Washington will just end the gridlock and set aside the kind of slash-and-burn partisanship we’ve seen these past few years – our economy will be stronger a year from now. And five years from now. And ten years from now. And as long as I have the privilege of serving as your President, I’ll spend every minute of every day I have left in this office doing everything I can to build that better bargain for the middle class and make this country a place where everyone who works hard can get ahead.
Thank you, Arizona. God bless you, and God bless the United States of America.
Hooah!
Here's the White House infographic on middle class homeownership:
http://www.whitehouse.gov/share/protecting-homeownership
Here is the twitter location to ask a housing question - https://twitter.com/search?q=%23AskObamaHousing&src=hash
"He will also call for Fannie and Freddie's investment portfolios to be wound down by at least 15 percent per year."
and this was from a Wall street journal article that was just put out. http://online.wsj.com/article/SB10001424127887323420604578650472166427406.html
"In the past, the White House has talked of winding down Fannie and Freddie, but in a shift, a set of administration principles released Monday suggested that while the business model of Fannie and Freddie would indeed end, parts of the companies themselves could be part of a "responsible transition" towards some to-be-determined end state."
Looks like he might back privatizing them. Not sure.
Obi, what do you think?
Inside mortgage finance poll respondents say fannie freddie are not going anywhere, stay as it is. you can see the result only if you take the poll. it is on the right hand side.
13%
It’s a good idea to replace Fannie Mae and Freddie Mac with some sort of government MBS program that provides catastrophic insurance coverage.
9%
Fannie Mae and Freddie Mac should be dissolved but not replaced with any new government program. The private sector can fill any gap in mortgage financing.
78%
It’s a big mistake to eliminate Fannie Mae and Freddie Mac given their current importance to the mortgage market as well as the fact that they are paying billions of dollars to the Treasury.
http://www.insidemortgagefinance.com/
That was fun!!!
Perfect!
The White House is urging people to submit questions via Twitter (using the hashtag #AskObamaHousing)
***MUST READ***
Freddie Mac Announces 50th Multifamily Securities Offering Since 2009, Series K-031
MCLEAN, VA--(Marketwired - Aug 5, 2013) - Freddie Mac (OTCQB: FMCC) today announced its 50(th) offering of multifamily mortgage-backed Structured Pass-Through Certificates ("K Certificates") since the program began in 2009. To date, the company has sold more than $60 billion in multifamily mortgages for securitization.
"When we introduced our K-Deal offerings in 2009, our goal was to make it a scalable program with regular issuance," said Mitchell Resnick, vice president of Freddie Mac Multifamily Loan Pricing and Securitization. "We've achieved that goal and at the same time reduce credit exposure by transferring the riskiest portion of the structure to private capital markets investors."
Resnick added, "Throughout the program's history, investor demand has been solid, enabling us to become one of the largest U.S. issuers of CMBS. We've steadily increased our securitized loan volume every year from $2 billion in 2009 to $21 billion in 2012, and more than $19 billion so far this year. We look forward to continuing to build the program."
Annual securitized loan volume
2009 - $2.1 billion
2010 - $6.4 billion
2011 - $13.7 billion
2012 - $21.2 billion
2013 - $19.2 billion YTD
K-031 Certificates
With the new offering today, the company expects to issue approximately $1.3 billion in K Certificates (the "K-031 Certificates"), which are expected to price on or about August 8, 2013, and settle on or about August 27, 2013. This is Freddie Mac's thirteenth K Certificate offering this year.
The K-031 Certificates are backed by 88 recently-originated multifamily mortgages and are guaranteed by Freddie Mac. The K-031 Certificates will be offered to the market by a syndicate of dealers led by Barclays Capital Inc. and J. P. Morgan Securities LLC as co-lead managers and joint bookrunners. CastleOak Securities, L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC will serve as co-managers.
The K-031 Certificates include two senior principal and interest classes, one senior interest only class and one junior interest only class. Moody's Investors Service, Inc. and Morningstar Credit Ratings, LLC are rating the three senior classes of K-031 Certificates, which are each expected to receive a rating of "Aaa(sf)" and "AAA," respectively, subject to ongoing monitoring.
Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities. K Certificates feature a wide range of investor options with stable cash flows and a structured credit enhancement. K-Deals include guaranteed senior principal and interest, and interest only classes.
The preliminary offering circular supplement relating to the K-031 Certificates can be found at http://www.freddiemac.com/mbs/data/k031oc.pdf. A Freddie Mac multifamily investor presentation on the K Certificate deal structure and multifamily loan portfolio performance data is available at FreddieMac.com. Freddie Mac also has an online tool for investors and analysts, Multifamily Securities Investor Access. This is a central database that houses all post-securitization data from Investor Reporting Packages to help investors and analysts monitor K-Deal performance.
This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission ("SEC") on February 28, 2013; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") since December 31, 2012, excluding any information "furnished" to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information "furnished" to the SEC on Form 8-K.
Freddie Mac's press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2012, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com. Twitter: @FreddieMac
***Please Sign, takes 2 secs***
Termination of dividends. Fannie Mae can Re-Capitalize! This is way better than a Full profit Sweep
LET GSEs PAY US BACK ACT OF 2013 H.R 2435:
Become a Cosponsor Here - https://t.co/Chu3Mz20Et
H.R.2435 Let the GSEs Pay US back
(1) Termination of dividends.--That after such
modification, any Senior Preferred Stock purchased under such
Agreement by the Department of the Treasury shall not accrue
further dividends.
(2) Treatment of enterprise draws on treasury.--That any
amounts received, before or after such modification, during a
single year by the enterprise as a draw on the commitment made
by the Department of the Treasury under such an Agreement,
shall be treated as a loan made by the Treasury to the
enterprise that--
(A) was originated on the date of the last such
draw during such year;
(B) has an original principal obligation in an
amount equal to the aggregate amount of such draws;
(C) has a term to maturity of 30 years;
(D) has an annual interest rate of 5 percent for
the entire term of the loan;
(E) has terms that provide for full amortization of
the loan over such term to maturity; and
(F) shall be repaid by the enterprise in accordance
with the amortization schedule established for the loan
pursuant to subparagraph (E) of this paragraph, subject
to paragraph (3).
(3) Treatment of dividends paid.--That any dividends paid
by the enterprise to the Department of the Treasury under the
Senior Preferred Stock Agreement before such modification of
such Agreement shall be treated as payments of principal and
interest due under the loan referred to in paragraph (2), and
shall be credited against payments due under the terms of such
loan (in accordance with the amortization schedule established
for such loan pursuant to paragraph (2)(E)), first to such loan
have the earliest origination date that has not yet been fully
repaid until such loan is repaid, and then to the next such
loan having the next earliest origination date until such loan
is repaid.
CONGRESSIONAL SPONSOR:
MICHAEL CAPUANO
Introduced: 2013.06.19
State Of: Massachusetts
District: 7
Thanks:) We're getting ready todo a major update to the site. Once that is completed, we will register with the major search engines.
"It asks for too much personal information"
A name, email, & zip.. The rest of the information is not needed to continue on to the survey
"who is running this"
Thomas Goddard http://www.restorefanniemae.us/ohgoddard
I am a computer science student at UCSC, and a member of College Ten, which strives for social justice and community development.
I have over 15 years experience in web application, software development, and graphics programming. Before returning to college, I was a solutions architect at HP, developer for Microsoft, and helped to create applications for The North Face, and many other businesses. From 2006-2010, I volunteered and worked with the Global Health Education Consortium, sponsored by a project created through Stanford University, to develop medical education content for underserved communities around the globe.
I am also the son of a retired Chrysler employee. My dad was employed at Chrysler for 25 years before it entered bankruptcy. He lost his job, retirement, and benefits. This is another reason that I understand the situation with Fannie Mae and Freddie Mac, and hope the same does not happen to the employees and shareholders.?? In addition, I was a homeowner during the housing crisis, and suffered a substantial loss in home value. Fortunately, we minimized our risk by saving money and using it to pay down the loan until we were able to refinance. Others in our neighborhood were not so fortunate, and the circumstances that led to their foreclosure were troubling.
At the time, banks were lending to people in our neighborhood with no credit. For example, one buyer near us was foreclosed on within a month of the original closing. It was clear to me that this type of lending had allowed banks to create and quickly sell their loans to companies like Countrywide (Bank of America), bundle the loans into investment packages after they had illegally rated the loans AAA, and sell them to unsuspecting investors. Like any product in the market, it's the seller's responsibility to honestly provide the buyer with details about the quality, risk, etc., and accept a return if the product does not, in fact, meet the quality. I only later came to find out that these loans were packaged by the banks and rated illegally as AAA (Fannie and Freddie are suing the banks for fraud, and have settled for billions of dollars to date.)
Thank you for your support, and I appreciate your time! ?
"for what reason"
Who is Restore Fannie Mae?
A:
We are taxpayers, families, students, shareholders, and people -- just like you! Moreover, we are a grassroots, non-partisan movement demanding an end to the unconstitutional conservatorship of Fannie Mae and Freddie Mac by the US government.
Did Restore Fannie Mae originate from the Tea Party, Occupy Wall Street or some other group?
A:
No. We originated through shareholders and citizens effected by the subprime mortgage crisis, which recognize a set of convoluted circumstances, fueled by overzealous politicians, resulting in social injustices and unnecessary actions by the US government.
What are you trying to accomplish?
A:
We support the Democratic Principles of Finance Reform, and know that the newly revitalized Fannie and Freddie will provide all of these principles as well as: NO "years" of legal hearings; payback to the government; and a swift back-to-business model. In other words, it's the most practical and reliable solution. Moreover, our goal is to support the discussions, and facilitate fact sharing in Washington.
Restore Fannie Mae (and Freddie Mac) wishes to end the unconstitutional conservatorship. We must gain support from government officials to direct the FHFA to comply with the original intent of the conservatorships and amend, retroactively, the Agreements with the Treasury to allow the companies to use funds in excess of the 10.0% annual dividend amount for the rebuilding of their capital structures and the repayment of their debt to the Treasury. Additionally, the two firms are to be released from their conservatorships and returned back to the shareholders when each company has achieved certain risk-based capital requirements, as provided by law 12 U.S.C. § 4611(a)(1).
Furthermore, Fannie and Freddie are to be relisted on the New York Stock Exchange, with any remaining amounts owing on the Treasury's aggregate liquidation preferences to be satisfied by exercising whatever portions of the warrants are necessary to retire the debts and unpaid interest (dividend). Also, through a prudent mix of debt and unused Treasury warrants, the two companies could hasten the process of full recapitalization beyond the basic regulatory requirements. Consider, too, that conservative estimates indicate that on a fully diluted basis, the initial values of the common shares for Fannie and Freddie could be approximately $37.00/share and $29.00/share, respectively. And finally, if Congress still wishes to reform the enterprises, the Congressional Research Service has provided several alternatives in their February 2013 report to Congress that are not contrary to the conservatorships, the taxpayers, or the tax-paying shareholders.
How are you going to do this?
A:
Restore Fannie Mae facilitates local non-violent protests around the country. The purpose of the rallies is to spread awareness of and spur political action against unconstitutional "takings" by the U.S. government, and request appropriate regulatory actions to prevent a future financial crisis.
For comprehensive Due Diligence, regarding Fannie Mae & Freddie Mac, go to: http://www.restorefanniemae.us/blog
*****Please take the Fannie Mae & Freddie Mac Favorability Survey at:
http://www.restorefanniemae.us/survey
Follow us on twitter: @RestoreFannie
RestoreFanniemae.us
Great DD, updated daily. http://www.restorefanniemae.us/blog
Join us in our effort to Restore Fannie Mae to the taxpaying shareholders! Help restore this great business from government conservatorship, and support progressive ideals. Help us bring justice for the taxpayers, homeowners, communities, and shareholders, which measure progress by more than just profit.
Fannie and Freddie look to run down clock
3 August to 9 August 2013 | By Philip Scipio
PrintEmailSave
Despite current efforts to wind down the behemoth government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, they may be around for a long time yet. A repayment of the massive government US$187bn bailout may take the wind out of the sails of reformers – the two have already paid some US$132bn in dividends to US taxpayers – and competing reform efforts in the US Congress may complicate moves to abolish the two giants.
“The political will on both the left and right is towards ending the current system,” said Paul Leonard, senior vice-president of government affairs for the Financial Services Roundtable’s Housing Policy Council.
Leonard represents a group of mortgage originators and insurers that are supporting an approach being developed in the US Senate that would create a Federal Mortgage Insurance Corporation, modelled after the Federal Deposit Insurance Corporation, which would insure eligible mortgages and provide a backstop behind private capital. That plan would wind down Fannie and Freddie within five years.
“We are strongly in favour of reforming the system,” Leonard said. “We think that Fannie and Freddie should be gradually phased out and replaced with a structure that is based on private capital with protections for the taxpayer.”
Private capital is currently being sidelined, with government entities, including Fannie and Freddie, financing nine out of 10 US mortgages. Private financing through RMBS has all but disappeared.
A parallel reform effort going through the US House of Representative would also see the end of the agencies in five years but would not create a government backstop. The proposal would also repeal several components of the Dodd-Frank Act. The difference in approach between the two chambers could doom any effort to restructure the housing finance system.
“The steam will go out of the reform movement the longer they wait and the more Freddie and Fannie return to solid footing”
“There’s still a lot of intellectual groundwork to be done to nail down exactly what we need to do and reach consensus,” said Moody’s chief economist Mark Zandi, who admitted there was no immediate catalyst for change.
Zandi is in favour of winding down the giants. If allowed to continue they embody “too big to fail risk” and the risk is unnecessary given that private financial institutions are willing to step in, he said. Zandi and Leonard believe that private RMBS issuance will pick up when qualified residential mortgage rules under Dodd-Frank are finalised.
“The most important thing is not to mess it up. Not to do something that jeopardises the smooth-running mortgage finance system,” said Zandi.
Slip away
Those anxious to see the GSE’s being wound down, however, fear the opportunity could slip away.
“The steam will go out of the reform movement the longer they wait and the more Freddie and Fannie return to solid footing,” said Anthony Sanders, a professor of finance at George Mason University. He was previously head of asset-backed and mortgage-backed securities research at Deutsche Bank.
Banks have been in two minds about Fannie and Freddie for years, he said. On the one hand, they want to capture the market themselves and generate huge fees. On the other, they like the stability Fannie and Freddie provide, Sanders said.
Unless there is comfort that any new entity can be ring-fenced from Congressional meddling, there is a good chance that a similar system will eventually be recreated, Sanders said. “Since Fannie and Freddie are already in place, why not just redo their charter and reform them?” he asked.
Love it!
***Please Sign, takes 2 secs***
Termination of dividends. Fannie Mae can Re-Capitalize! This is way better than a Full profit Sweep
LET GSEs PAY US BACK ACT OF 2013 H.R 2435:
Become a Cosponsor Here - https://t.co/Chu3Mz20Et
H.R.2435 Let the GSEs Pay US back
(1) Termination of dividends.--That after such
modification, any Senior Preferred Stock purchased under such
Agreement by the Department of the Treasury shall not accrue
further dividends.
(2) Treatment of enterprise draws on treasury.--That any
amounts received, before or after such modification, during a
single year by the enterprise as a draw on the commitment made
by the Department of the Treasury under such an Agreement,
shall be treated as a loan made by the Treasury to the
enterprise that--
(A) was originated on the date of the last such
draw during such year;
(B) has an original principal obligation in an
amount equal to the aggregate amount of such draws;
(C) has a term to maturity of 30 years;
(D) has an annual interest rate of 5 percent for
the entire term of the loan;
(E) has terms that provide for full amortization of
the loan over such term to maturity; and
(F) shall be repaid by the enterprise in accordance
with the amortization schedule established for the loan
pursuant to subparagraph (E) of this paragraph, subject
to paragraph (3).
(3) Treatment of dividends paid.--That any dividends paid
by the enterprise to the Department of the Treasury under the
Senior Preferred Stock Agreement before such modification of
such Agreement shall be treated as payments of principal and
interest due under the loan referred to in paragraph (2), and
shall be credited against payments due under the terms of such
loan (in accordance with the amortization schedule established
for such loan pursuant to paragraph (2)(E)), first to such loan
have the earliest origination date that has not yet been fully
repaid until such loan is repaid, and then to the next such
loan having the next earliest origination date until such loan
is repaid.
CONGRESSIONAL SPONSOR:
MICHAEL CAPUANO
Introduced: 2013.06.19
State Of: Massachusetts
District: 7
http://www.restorefanniemae.us/survey
Please take the survey: Fannie Mae & Freddie Mac Favorability Survey
Follow us on twitter: @RestoreFannie
***Please Sign, takes 2 secs***
Termination of dividends. Fannie Mae can Re-Capitalize! This is way better than a Full profit Sweep
LET GSEs PAY US BACK ACT OF 2013 H.R 2435:
Become a Cosponsor Here - https://t.co/Chu3Mz20Et
H.R.2435 Let the GSEs Pay US back
(1) Termination of dividends.--That after such
modification, any Senior Preferred Stock purchased under such
Agreement by the Department of the Treasury shall not accrue
further dividends.
(2) Treatment of enterprise draws on treasury.--That any
amounts received, before or after such modification, during a
single year by the enterprise as a draw on the commitment made
by the Department of the Treasury under such an Agreement,
shall be treated as a loan made by the Treasury to the
enterprise that--
(A) was originated on the date of the last such
draw during such year;
(B) has an original principal obligation in an
amount equal to the aggregate amount of such draws;
(C) has a term to maturity of 30 years;
(D) has an annual interest rate of 5 percent for
the entire term of the loan;
(E) has terms that provide for full amortization of
the loan over such term to maturity; and
(F) shall be repaid by the enterprise in accordance
with the amortization schedule established for the loan
pursuant to subparagraph (E) of this paragraph, subject
to paragraph (3).
(3) Treatment of dividends paid.--That any dividends paid
by the enterprise to the Department of the Treasury under the
Senior Preferred Stock Agreement before such modification of
such Agreement shall be treated as payments of principal and
interest due under the loan referred to in paragraph (2), and
shall be credited against payments due under the terms of such
loan (in accordance with the amortization schedule established
for such loan pursuant to paragraph (2)(E)), first to such loan
have the earliest origination date that has not yet been fully
repaid until such loan is repaid, and then to the next such
loan having the next earliest origination date until such loan
is repaid.
CONGRESSIONAL SPONSOR:
MICHAEL CAPUANO
Introduced: 2013.06.19
State Of: Massachusetts
District: 7
"I probably cost Berkshire at least $5billion for example by sucking my thumb twenty years ago or close to it, when Fannie Mae was having some troubles. We could have bought the whole company for practically nothing." @ 0:30:07 - 0:30:23
"Omission is way bigger than commission. Big opportunities in life have to be seized!" @ 0:31:05 - 0:31:12
- Warren Buffet, from 2001 speech at University of Georgia
Great DD, updated daily. http://www.restorefanniemae.us/blog
Join us in our effort to Restore Fannie Mae to the taxpaying shareholders! Help restore this great business from government conservatorship, and support progressive ideals. Help us bring justice for the taxpayers, homeowners, communities, and shareholders, which measure progress by more than just profit.
Great DD, updated daily. http://www.restorefanniemae.us/blog
Join us in our effort to Restore Fannie Mae to the taxpaying shareholders! Help restore this great business from government conservatorship, and support progressive ideals. Help us bring justice for the taxpayers, homeowners, communities, and shareholders, which measure progress by more than just profit.