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.
The reality is that FHFA is concerned about their INABILITY TO ATTRACT THE TOP SHELF MANAGEMENT TALENT NECESSARY TO RUN THE TWO LARGEST FINANCIAL INSTITUTIONS IN THE WORLD FOR GUBMINT PAY AND BENEFITS!
Most high level professional talent WANT TO SHARE IN THE WEALTH OF THE CORPORATIONS THEY GIVE THEIR BLOOD, SWEAT, AND TEARS TO and not have some governmental lackey tell them how they will perform their management functions!
This is one of the many inconvenient truths when you turn a temporary conservatorship into a defacto nationalization.
That's my Uncle Suggy !
Check out Tom Jones comment to FHFA: "Bottom line, government can LEGALLY rob anyone. It is rather easy to do so."
Couldn't have said it better myself!
I think you hit the nail on the head! Understanding the minutiae of the role of Secondary Mortgage Finance and its impact on the overall cost of housing low and moderate income Americans is beyond the 5 to 10 minute attention span of almost the entire legislature and probably 99% of Americans.
I'm certain 99%+ of Americans have no idea what the impact of a 10 basis point increase in their mortgage costs for millions of new mortgages underwritten for the next 10 years from the upcoming bill to be signed means to their housing costs! CBO guestimates $21 billion.
When we had the large mortgage portfolio kicking off over 100 bps of net interest margin income, some of that found its way subsidizing low and moderate income Americans housing needs.
When I worked at Fannie Mae between 1988 and 1993, the average guaranty fee on MBS I was putting together was between 21 to 25 basis points. Today, with the 10 basis point additional guarantee fee it's about 59 basis points!
TH has done an outstanding job trying to explain the intricacies of Secondary Mortgage Market Finance to some of the important DC decision makers and I am grateful that he has taken the time, resources, and energy to participate.
Will the DC decision makers listen to his sage advice or continue to pilfer the gses for short term political gains?
"Using arbitrary figures and buffers as opposed to actual data when setting the final capital rule is a disservice to the housing industry and the borrowers it serves. Both GSE’s have been reformed through the efforts of the FHFA over the last 13 years. That should be reflected in the capital requirement. Tim Howard is the only person that points to actual data when putting forth is recommendations and suggestions. Of all the comments issued, I would like to see his reviewed in detail and responded to publicly to provide full transparency."
Before and during the Great Depression banks would only lend money for residential real estate in the US for short time periods like 5 years with a balloon payment due at the end. This exacerbated and likely helped prolong the Great Depression. In the aftermath of the Great Depression, FDR and the US Congress created FHA and Fannie Mae to buy mortgages from banks and the 30 year fixed rate PREPAYABLE AT WILL mortgage was born.
Canada doesn't have them even today and few countries offer PREPAYABLE AT ANY TIME 30 year frms. I think Americans today don't realize and take for granted their access to this product.
“Nothing lasts longer than a temporary government program.”
- Ronald Reagan
How much house can you get in California for just under $1m?:
A geodesic dome house in South Lake Tahoe, a three-bedroom loft in Long Beach and a Victorian home in Alameda.
South Lake Tahoe | $974,900
A geodesic dome built in 1987, with four bedrooms and two bathrooms, on a 0.2-acre lot
The Lake Tahoe area has long been a destination for second-home buyers from elsewhere in the state, a trend that has picked up considerably in recent years. This house is in Montgomery Estates, a neighborhood that is particularly appealing, thanks to its proximity to the Heavenly Mountain ski resort, about four miles away (or a 10-minute drive), and High Meadow Trailhead, popular with hikers and mountain bikers, about half a mile away.
South Lake Tahoe, with its shopping and dining options, and El Dorado Beach are a 10-minute drive. Reno, Nev., is about an hour and 20 minutes away.
Size: 2,068 square feet
Price per square foot: $471
Indoors: The house is set back from the street, with stairs leading up to a wooden porch.
The front door opens directly into the kitchen, updated by the sellers with new stainless-steel appliances, gray subway tile and quartz counters. Just beyond the kitchen is an open living room, rounded thanks to the shape of the house. In one part of the space is a sitting area in front of windows looking out over the neighborhood. In another part of the space is a built-in bar; behind it, sliding-glass doors open to a deck. On the other side of the living space is a dining area with a navy-blue accent wall.
Two bedrooms are on this floor, just off the dining area. They are connected by a bathroom with two vanities and a combination tub and shower with a glass door and slate tile.
From the center of the first floor, a winding staircase leads to the second level, where a landing looks down over the living area. To the right is a guest room big enough to hold a full-size bed and a twin-size bed, with a triangular window set into the lower part of the wall and a ladder up to a lofted space that could be used for storage or as a reading nook. On the other side of the landing is the primary bedroom, which has two triangular windows and an en suite bathroom with a shower that has a frosted-glass door. This bathroom can also be reached from the hallway.
Outdoor space: The house is surrounded by mature trees and has a deck with room for a dining table. Around the corner is a paved patio with a hot tub.
Taxes: 12,192 (estimated)
Contact: Mark Salmon, Compass, 530-318-7637; compass.com
Long Beach | $975,000
A three-bedroom, two-bathroom loft in a 1925 condominium building
This building was the Long Beach outpost of the Kress department store chain and has ornamental terra cotta on the facade, a common feature of Kress stores, many of which have been converted into lofts. This unit is the largest in the building, and was for some time the residence of the architect who oversaw the residential conversion.
The neighborhood is active, and nightlife is a particular draw in this part of Long Beach. The waterfront is about a mile away, and the Aquarium of the Pacific, one of the attractions there, is about a 10-minute drive.
Size: 2,147 square feet
Price per square foot: $454
Indoors: The unit’s front door opens into a bright foyer with new vinyl-plank flooring. Straight ahead is a kitchen with a stainless-steel-topped center island and counters, and stainless-steel appliances, including a Bosch dishwasher and a Viking range.
The rest of the living area is open, with room for dining and sitting areas. Beams and ductwork are exposed, and a wood platform sits directly in front of a floor-to-ceiling window that floods the space with natural sunlight. Frosted-glass doors on the right side of the space open to a den with one wall of exposed brick and another of exposed concrete.
To the left of the entry is the primary suite, which has a cozy sitting area in front of glass doors that open to a bedroom with hardwood floors and recessed lights. The en suite bathroom has a wood vanity, two basin-style sinks and a soaking tub framed in white subway tile.
To the right of the entry is a short corridor connecting two guest rooms and a bathroom. Both bedrooms have exposed-concrete walls and ceilings, and the bathroom has a walk-in shower lined with more white subway tile.
Outdoor space: On the fifth floor of the building is a communal roof deck with views of downtown Long Beach, furnished with dining tables, barbecues and seating. This unit comes with a secure storage space in the garage and two parking spaces, one equipped with an electric vehicle charger.
Taxes: $12,384 (estimated), plus a $549 monthly homeowner association fee
Contact: Tim Majka, Keller Williams Coastal Properties, 562-900-9430; kw.com
Alameda | $975,000
An 1890 Victorian house with three bedrooms and two bathrooms, on a 0.1-acre lot
This house is a block from Park Street, the main thoroughfare of Alameda, a Bay Area city with nearly 80,000 residents. Within walking distance are coffee shops, a cafe specializing in waffles and pancakes, and a restored movie theater with a bar and restaurant.
Alameda High School, a well-ranked public school, is about half a mile away, as are a public elementary school and a Montessori preschool. Downtown Oakland is a 15-minute drive; commuting into San Francisco takes about 25 minute by car and 40 minutes by public transit.
Size: 1,152 square feet
Price per square foot: $846
Indoors: The front door is set in a covered porch at the top of a tall stoop. It opens into a hallway with hardwood floors that extend into a living room with windows facing the side of the property and an iron-and-glass ceiling fixture.
Past the living room is a kitchen with white wainscoting, updated during a 2006 remodel that included upgrades to the HVAC, electrical and plumbing systems. Behind the kitchen is one of the home’s two bathrooms — this one has a stall shower and more wainscoting — as well as a door opening to the rear deck.
From the living room, a narrow staircase leads to the second floor, where there are two bedrooms and a bathroom. To the left is the primary bedroom, big enough for a queen-size bed, with original molding and two windows overlooking the street. Across the hall is a guest room with backyard-facing windows and a deep closet. At the end of the hall is a bathroom with a porcelain pedestal sink and an old-fashioned claw-foot tub.
Another guest room with a wall of built-in shelves is off the entry hall.
Outdoor space: A deck with a wood railing off the main floor has plenty of space for a dining table. Down a few stairs is a grassy backyard landscaped with trees and bushes. Running alongside the house is a driveway big enough to hold two cars.
Taxes: $11,218 (estimated)
Contact: Dev Parikh, Golden Gate Sotheby’s International Realty, 415-812-3777; sothebysrealty.com
The major problem with the heated housing market is that prices cannot sustainabily grow at 4 times the growth rate in family incomes unless people are selling inflated assets like stocks and putting huge down payments down.
We'll see what happens!
Did you hear this tweet from the "evil multimillionaire hedge fund guy" who happens to be Senator Ron Wydens son?
"Why does he hate us / the American dream so much?!?!?!?!" the Florida-based hedge fund manager wrote. "Reality is: most legislators have never built anything… so I guess it’s easier to mindlessly and haphazardly try and tear stuff down."
"Thankfully, I think I can compound faster than my dad and his cronies can confiscate it…" Wyden added."
I thought you might find it amusing...
MBA forecasts US Home Prices decreasing then stabilizing starting 4Q21
Median Price of Total Existing Homes (Thous $):
2021 344.6
2022 355.3
2023 354.8
2024 356.1
https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary/mortgage-finance-forecast-archives
https://finance.yahoo.com/news/home-prices-drop-2022-says-154123661.html
3Q21, Fannie Mae: "Average charged guaranty fee on newly acquired conventional single-family loans is a metric management uses to
measure the price we earn as compensation for the credit risk we manage and to assess our return. Average charged
guaranty fee represents, on an annualized basis, the sum of the base guaranty fees charged during the period for our
new single-family conventional guaranty arrangements, which we will receive monthly over the life of the loan, plus the
recognition of any upfront cash payments, including loan-level price adjustments, based on an estimated average life at
the time of acquisition. We use loan-level price adjustments, including various upfront risk-based fees, to price for the
credit risk we assume in providing our guaranty. FHFA must approve changes to the national loan-level price
adjustments we charge and can direct us to make other changes to our single-family guaranty fee pricing.
Our average charged guaranty fee on newly acquired conventional single-family loans, net of TCCA fee, increased in
the third quarter of 2021 compared with the third quarter of 2020 due to the slightly weaker credit risk profile of our third
quarter 2021 acquisitions as well as the impact of the adverse market refinance fee, which was in effect for one month
in the third quarter of 2021."
What was the NET AVERAGE GFEE ON PRODUCT ACQUIRED IN 3Q21 (BEFORE THE 10 BP PAYROLL TAX CUT OF 2011!)? 47.3 basis points
SO, ALL THE NEW LOANS ACQUIRED IN 3Q21 HAD AN AVERAGE GFEE OF 57.3 BPS OR JUST OVER 1/2 OF 1%. On a 30 yr fixed rate mortgage at 3.00%, approximately 20% OF THE HARD WORKING AMERICAN FAMILIES PRINCIPAL AND INTEREST PAYMENT GOES TO PAYING THE TWINS FOR THE GUARANTY PLUS TEMPORARY PAYROLL TAX CUT PLUS 4.2BPS FOR THE HOUSING TRUST FUND.
I ask you now, does throwing on the 10 basis point infrastructure bill guarantee fee make sense for hard working Americans?
When I worked at Fannie Mae between 1988 and 1993 the average MBS Guaranty Fee was 21 to 25 basis points.
Do think the government is better at running this or a private corporation?
That's what I'm worried about as we enter unbelievably our 14th year of CONservatorship, that the twins are an easily accessible grab bag of goodies for the "public it serves". It's like death by 1,000 cuts!
I'm also a little concerned that the new administration hasn't really formulated a plan on what exactly they want to do with the gses.
If you were in their shoes, wouldn't you want to load up the gses with plenty of expenses that benefit your voter base and other constituencies? They also want to see first I would imagine whether or not the $350B tailored to low and moderate income American housing makes it through Congress.
Maybe we will know more by the 1st or 2nd Q 2022...
Clearly the 10 basis point additional guarantee fee IS A TAX ON LOW AND MODERATE INCOME BORROWERS WHO GET A GSE MORTGAGE FOR THE NEXT 10 YEARS!
When low and moderate income Americans are already struggling to obtain affordable housing this is the exact opposite of what our dear leaders in the US Congress should be doing.
You could make an argument that better bridges, transportation Infrastructure, rural broad band access, electric chargers, replacing lead pipes in older housing will increase the value of low and moderate income Americans typically largest asset but the correlation is not dollar for dollar...
It also makes delivery of mortgages to the gses less competitive adding artificial costs.
Read this today in the WSJ, China is likely in a residential real estate market housing bubble, many Chinese families (there is no social security benefits in China) have substantial portions of their wealth in sometimes unoccupied "future cities":
"HONG KONG—China's aggressive campaign to root out speculative real-estate activity could slow the country's growth rate for years to come, economists say, even if the worst-case scenario—a major housing correction with sharply falling home prices—is averted.
China is attempting a controlled slowdown of the country's property market— whose decadeslong boom has led to runaway price increases and a glut of empty apartments —in an effort to reduce financial risks and put the economy on sounder footing.
While economists generally agree that purging the market of irrational behavior is necessary, they say the campaign will at least partly deprive China of one of its biggest sources of growth. Chinese policy makers have signaled that they recognize there will be a trade-off for economic growth, but have shown no indication that they plan to scrap the regulations on developers and home buyers.
Real-estate activity accounts for about one-fourth of gross domestic product in China—considerably more than in the U.S.—and speculative behavior has supported employment and revenue-collection in cities for years. Without a booming property market, China is more likely to clock annual growth of around 3% to 5% in the next few years, economists say, instead of the more than 6% growth it has been accustomed to.
"A successful campaign to make housing more affordable will come at a cost, perhaps putting 5-6% growth out of reach durably," wrote economists from the Institute of International Finance, a Washington-based global association of financial firms, in a recent report. The IIF projects China's GDP to expand by an average of 3% or lower each year from 2022 to 2031 as its economy matures, per capita incomes rise and real estate slows.
That's lower than the average annual growth rate of 5% that China needs to maintain from now until 2025 to avoid the middle-income trap—a phenomenon in which developing economies stall before people's incomes catch up to more advanced economies—according to speeches earlier this year by Zhu Guangyao, China's former vice minister of finance.
Real estate and other related industries contributed 24% of China's GDP in 2016, compared with 15% in the U.S., according to calculations by Oxford Economics.
"There is simply no other sector or industry that can fill up the gap if the property industry is no longer a growth driver," said Yao Wei, an economist at Société Générale in Hong Kong.
Chinese officials have long emphasized the need for more high-quality growth from domestic consumption, as opposed to wasteful investments in property and infrastructure.
After years of fast-climbing home prices and rising debt, Chinese authorities imposed new rules during the past year meant to slow the market and limit how much developers can borrow to keep expanding. Those steps led to a sharp decline in sales and raised worries of a possible severe housing downturn.
Many analysts say Beijing has plenty of tools to contain the damage. Yet even a controlled drop in real-estate activity will affect lots of people.
Private companies such as struggling developer China Evergrande Group employ hundreds of thousands of workers nationwide, while also supporting construction firms and other contractors. Nearly 20% of China's 285 million migrant workers earned income from construction-related jobs in 2020, data from China's National Bureau of Statistics shows.
Centaline Property, a major property agency in China with nearly 40,000 staff, plans to lay off around 1,000 agents in its Shanghai and Shenzhen offices as the market slows, said a person familiar with the matter. Centaline declined to comment. Agents at property firms say they are earning fewer commissions, which could affect spending.
Local governments, which face limited options under Chinese regulations for raising revenue through taxes and borrowing, have become overwhelmingly dependent on land sales, which are expected to slow as the real-estate market cools. In 2020, land-sale revenues reached $1.3 trillion, equivalent to 84% of local-level fiscal revenue that year, up from 70% in 2019 and 37% in 2015, according to data provider Wind.
If localities can't sell as much land in the future, it will limit their ability to invest in infrastructure, another growth engine for China, and repay their own rising debts . The total debt of local-government financing vehicles, a popular way for officials to obtain off-balance-sheet loans, reached about 52% of China's GDP by the end of 2020, according to calculations by Goldman Sachs.
"The primary source of revenue to pay off these debts is through land sales," said Houze Song, a research fellow at the Paulson Institute, a Chicago-based think tank.
In the southwestern city of Beihai, where land sales accounted for 47% of total revenue for the local government in 2019, Wei Zhigang, a manager at a midsize developer, said average monthly sales have declined by more than half compared with pre-pandemic levels. Prospective buyers have become more reluctant to close deals as they anticipate more price drops, he said.
The company will no longer join land auctions in the city, but will instead focus on new developments in wealthier regions such as Zhejiang province, said Mr. Wei, whose company mainly sells resort properties. "The winter for us in the industry hasn't arrived yet," he said. "We have to be cautious."
Weaker demand for land could also curb the amount of fresh credit other businesses can obtain. More than half of the total loans in China's banking system are backed by land, a popular collateral Chinese banks accept when making loans, said Dinny McMahon, author of "China's Great Wall of Debt."
"If land prices and property prices start to decline, the ability and willingness of China's financial system to make loans will contract as well," he said.
Michael Pettis, a professor of finance at Peking University, said it is clear that Beijing wants to promote more high-quality growth, but it remains to be seen whether China will be willing to stomach much lower GDP next year, when growth momentum in both exports and consumption are expected to level off.
"In the long run it's a good thing to stop the bubble, but in the short run it's very painful to do so," Mr. Pettis said. "The question is whether they will continue to try to repress the growth of debt or will they step on the gas pedal again to get higher growth numbers.""
That's right Nats, existing 1st lien mortgages use to be assumable by the new buyer. I did this on a house in a home purchase in 1990, when I worked at Fannie Mae, the mortgagee said, "here fill out this form to make sure you qualify", I told the banker to go pound sand. Eventually we went to closing with me putting 10% down and assuming the FHA first which was a 1 yr arm.
On a $300,000 loan the low and moderate income American family will pay $300 the first year, $290 the second year, $280 the 3rd year, etc. There's also a 4.5 basis point Housing Trust fund fee, so $345 the first year, etc. This goes on until the gse borrower pays off the loan.
I'm sure these hard working American families could use these funds for other purposes.
For the 9 months ending September 30th, 2021, Fannie Mae alone paid $2.27B to the UST for the Payroll Tax Cut 10 bp fee enacted in 2011 and set to expire this year. Fannie also ytd sent up to $861 million to the Housing Trust fund.
That's alot of dough...
I agree. The problem with ANY of our dear leaders saying, "this is entirely paid for", is that most people don't want politicians deciding what to do with their wealth and will choose charitable contributions or other tax efficient ways to distribute their wealth....
Why have a country based on freedom and capitalism if you don't get to decide what to do with well over 1/2 your wealth if you are even lucky enough to have it?
The problem is the US Congress just agreed to saddle each and every gse borrower with a 10 basis point additional guarantee fee they will pay for over the life of their loans for TEN MORE YEARS!
I wonder if JB will say when signing the Infrastructure Bill: "And $21B is paid for by low and moderate income Americans!". He has no frickin clue, same thing with the clowns in Congress!
I don't even think the current administration has really tried to figure out what to do with the gses, there's no reason to act, the status quo gives the federal government 100% control with zero liabilities on the federal government.
This could be an inflection point within the current administration, do they want to even exit the CONservatorship or continue to extract goodies from the twins with a death by a thousand cuts given the shareholders lack of meaningful gains from the federal judiciary.
Will they continue with their anti conservatorship behavior under the guise of "in the best interests of the public it serves" mantra or continue to right the ship and plan to somehow restore this private capital in a 1st loss position public purpose partnership?
Thanks Golf! I think Warren Buffett hit the nail on the head, the government is a silent partner that always gets his cut. Here our "partner" has literally gotten not only a pound of flesh but the entire corpus!
When I worked at Fannie Mae they would challenge the IRS and win sometimes quite a bit of money. Same thing when I was working at GM:
https://www.washingtonpost.com/archive/politics/1987/06/09/irs-fannie-mae-square-off-in-court/35c1572c-df4b-46dc-9cea-a6c0bc5ddbdd/
Furthermore, Uncle Suggy doesn't always bring in big revenue when they tax people, if your choice was to write a check to the federal government or donate substantially to charity which one would you choose?
https://www.cnbc.com/2021/11/07/elon-musk-faces-a-15-billion-tax-bill-which-is-likely-the-real-reason-hes-selling-stock.html
"To help pay for the investments, the Plan calls for reforming the tax code to ensure mega-corporations and the wealthiest Americans pay their fair share. These reforms will make sure the wealthy play by the same rules as everyone else and ensure that high-income Americans pay the tax they owe under the law. No one making $400,000 per year or less will see their taxes go up. Instead, hard-working Americans and families will benefit from much-deserved tax cuts – such as the extension of the expanded Child Tax Credit and other tax credits for families and workers enacted in the American Rescue Plan Act."
The BBB plan calls for hiring 87,000 new IRS agents to recoup an alleged $500B in "unpaid taxes". Who do you think that they will come after when big corporations and billionaires unleash an army of highly paid accountants and tax attorneys that ties them up for years in Tax Court?
I'm pretty sure that the gses do 97 ltv loans with the borrower paying a monthly mortgage insurance payment on top of their P&I payment to cover the first loss position up to 80% of the original loan amount.
The private mortgage insurers are regulated by state financial regulators, guess what happened when the last financial crisis hit in 08-09? The MI'S either went out of business or ended up paying a small portion of their claims from defaulting mortgagors.
The gses ultimately bear the risk of the mortgagor defaulting and making the investors in the $7.2T MBS outstanding whole.
Since the federal government has chosen to do a defacto nationalization of the gses, continuing their 100% control of the entities over the last 13+ years, the federal government should put up to $7.2T in liabilities on the federal balance sheet.
Right now the federal debt per person in the US is $87,000.00:
https://www.usdebtclock.org/
Who doesn't want to know more about Mr. Yi? Apparently he is naturally deeply imbedded with the current administration and was a panelist at a major Brookings Institute forum with major heavy hitters from his party:
"How Has Dodd-Frank Shaped the Response to the Current Financial
Crisis, and Is it Prepared for the Next?
A central goal of Dodd-Frank was to make future crises less likely, and when they occur,
less harmful to taxpayers and the real economy. Core issues include capital and liquidity
requirements, stress testing, living wills, and resolution authority. Panel topics include
whether systemically important firms have internalized the costs of their potential failure,
reduced the probability of failure, reduced the potential costs to society should the firms fail,
insulated taxpayers better from potential bailouts, and other matters that often described
as the problem of Too-Big-To-Fail. Will Dodd-Frank govern financial regulation for decades?
Has it reduced financial harm during the current crisis? How will new financial technology
challenge the existing framework? Will the regulatory structure be strong enough to reduce the
likelihood of future financial crises, eliminate Too-Big-To-Fail, and make sure no unregulated
entity becomes systemically important, or will Dodd-Frank fail to uphold these promises?"
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.brookings.edu/wp-content/uploads/2020/05/conference-program-decade-of-dodd-frank-umich-brookings-final.pdf&ved=2ahUKEwiv7_v_n4X0AhWlg-AKHZhKAd44HhAWegQIGhAB&usg=AOvVaw2DKktsoS1FLaZTxeSlgG50
Mo Yi: https://www.politico.com/newsletters/transition-playbook/2020/11/16/handicapping-the-contenders-for-bidens-economic-team-791690
"CHARLES YI’s name is also in the mix for FDIC, where he once worked as the general counsel. Yi serves on one of the Biden transition landing teams, but he has also worked for corporate clients as a partner at Arnold & Porter, a fact that may nix his appointment.
Major disqualifiers for econ posts? Anything that reeks too much of Wall Street on your resume. Diversity is also incredibly important to the Biden team, so look for the transition team to announce its economic team as a group, like Obama did, to show off the range of voices."
Thanks Penn, this is the only pair of soap opera stocks I own that keeps me constantly amused and naturally disappointed! Let's see if Uncle Suggy gets his act together in the end or are we entering a new dark chapter where Uncle Suggy shakes every thin dime they can from their corporate carcasses just because they think they can.
United States: Post-Election Analysis 2020: Financial Services
11 November 2020
by Charles Yi , Paul Howard , Christopher Allen , David Freeman, Jr. and Amber A. Hay
Arnold & Porter
https://www.mondaq.com/unitedstates/commoditiesderivativesstock-exchanges/1004130/post-election-analysis-2020-financial-services
Charles Yi was general counsel for one of the largest financial institutions in the nation, that coincidentally happens to be in Senator Sherrod Browns home state, Ohio...
"FDIC taps Fifth Third Bank attorney as new general counsel
Posted online March 27, 2019 | 7:40 am
The Federal Deposit Insurance Corp. selected Fifth Third Bancorp's deputy general counsel and senior vice president as its next general counsel.
Nick Podsiadly succeeds Charles Yi, who's scheduled to step down at month's end after four years with the FDIC. The reason behind Yi's exit remains unknown.
Podsiadly previously was senior vice president for regulatory policy for Alabama-based Regions Financial Corp."
https://sbj.net/stories/fdic-taps-fifth-third-bank-attorney-as-new-general-counsel,63172
Mr. Yi: "A Former Regulator Shares His Advice for Boards
By: Emily McCormick, vice president of research for Bank Director
June 13th, 2019
Developing a positive relationship with regulators is important for any bank. How can banks foster this? There’s no one better to answer this question than a former regulator. Charles Yi served as general counsel of the Federal Deposit Insurance Corp. from 2015 to 2019, where he focused on policy initiatives and legislation, as well as the implementation of related rulemaking. He also served on the FDIC’s fintech steering committee. In this interview, Yi talks about today’s deregulatory environment and shares his advice for banks looking to improve this critical relationship. He also explains the importance of a strong compliance culture..."
https://www.bankdirector.com/issues/former-regulator-shares-his-advice-boards/
Well anyone is welcome to cut and paste it and tweet or whatever, but I've never tweeted or used Facebook or the other major forums but I have businesses that do and people have always done that for my businesses so I don't really know how all that works, but I do know how to hit the thumbs up button!
This is a little scary, Charles Yi was Senator Sherrod Browns close confidant, just like MC was buddies with Senator Shelby:
"Testifying before the House Financial Services Committee last week, Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams indicated that she would not be stepping down from her position until her term expires in 2023. “You have my commitment that I will work with whoever is on my board. I will even ensure this with you, I intend to fulfill the remainder of my term.” When asked about whether her organization is preparing for the transition to a new administration, McWilliams indicated that they are taking the necessary steps to transition. While President-elect Biden has not formally nominated anyone to the FDIC, some names have been identified, including a former aide to Sen. Sherrod Brown (D-OH) Graham Steele and Arnold & Porter lawyer, Charles Yi."
https://structuredfinance.org/news/fdic-chair-mcwilliams-vows-to-stay-on-until-terms/
https://www.americanbanker.com/news/fdics-mcwilliams-vows-to-finish-her-term
Let's see if Charles Yi will advise Sandra Thompson that HERA was a copy and paste from the S&L crisis of the 1980's from FDIC legislation and that the Incidental Powers of HERA were NOT intended to be the tail that wags the dog:
"What specific benefits do you believe you bring to Arnold & Porter?
In addition to my ability to crack jokes once in a while, I bring a unique perspective and set of experiences unlike anyone I know having worked at senior levels in Congress to draft legislation, and at Treasury and FDIC to implement legislation and enforce compliance. Although at times at the FDIC I was in the awkward position of having to explain/defend/disavow legislative provisions I had worked on as we were writing regulations to implement them (something I call having to eat your own cooking), I can provide insight from every angle when it comes to complying with legislation and regulation."
https://www.legal500.com/fivehundred-magazine/diversity-and-inclusion/charles-yi-too-much-is-never-enough/
"Now Freddie Mac is introducing a program to help renters build their credit history. The new program incentivizes apartment operators to report on-time rent payments through technology provided by Esusu Financial.
The technology automatically delivers on-time rental payment data from property management software programs to the credit bureaus. If renters miss payments, they are automatically unenrolled from the program so that negative information is not delivered to the credit bureaus (Equifax, Experian and TransUnion) if they are struggling financially.
Freddie Mac is the largest purchaser of multifamily loans, accounting for approximately 20 percent of the market. More than 90 percent of the rental units funded through Freddie Mac are affordable to households with low to moderate incomes. Freddie Mac will provide closing cost credits on loans to apartment owners who agree to report on-time rental payments through Esusu's platform.
Moreover, Freddie Mac negotiated discounted fees for Esusu's services, which report rents to all three credit reporting agencies while remaining in compliance with industry standards. Esusu can even report up to 24 months of past on-time rent payments, which can immediately provide a positive impact on renter's credit scores. Renters can verify their rental history on the platform.
Some property owners participate in programs that report rents to one or all three credit bureaus, and renters can also enroll themselves in programs such as RentReporters and RentTrack that send rental payment history to credit bureaus for a fee.
In August, Fannie Mae announced that its Desktop Underwriter system would be adjusted to automatically identify rent payments in mortgage applicants' bank statements. Renters can opt-in for that program to help them qualify for the loan. Records of missed or inconsistent rent payments will not negatively affect the renter's ability to qualify for a loan that will be sold to Fannie Mae.
The focus on including on-time rent payments is meant to help people with a limited credit history qualify for homeownership. Approximately 20 percent of Americans have little-to-no established credit history, according to Fannie Mae researchers, and Black and Hispanic consumers are disproportionately represented in that group.
Including a positive rental history can open credit opportunities to more renters. Fannie Mae's researchers studied a sample of mortgage applicants who had not owned a home during the previous three years and received an unfavorable recommendation through Desktop Underwriter.
Researchers found that 17 percent could have received an approved or eligible recommendation if their rental payment history had been considered."
Source: todays WP. Seems unusual to only report on time payments when qualifying for a GSE loan AND IGNORE MISSED OR LATE PAYMENTS!
I guess loading up the gses with borrowers who don't make their rent payments on time (coupled with 3% down) is part of the new "Responsible affordable housing lending" program?
The only housing related stuff I saw in the Infrastructure Bill is money to remove lead pipes from existing housing and some rural broad bandwidth. The social spending bill has $350B for housing I think.
The problem with Sandra and likely any nominee is a lack of enthusiasm for a release and exit from the CONservatorship. So far, Sandra just like her predecessor Mel has shown zero interest in release. In her brief tenure, Sandra has reincentivized the loss inducing CRT program and cut off the adverse market fee early sticking the gses with a projected $2B to $3B cost over the mortgage forbearance program. MC said in his exit interview with Larry Kudlow that the new administration will find ways to load up costs on the gses.
I anticipate that whoever ends up as FHFA Director, release plans will be delayed and sacrificed so the current administration can force the gses to load up on barely profitable high risk loans under a "responsible affordable housing lending" mantra under the "best interests of the public it serves" Incidental Power under HERA.
New tax on low and moderate income Americans from the Infrastructure Bill is estimated by CBO to be $21B: "Under section 90005, Fannie Mae and Freddie Mac would be required to increase—by an average of
10 basis points—the guarantee fee they assess on loans included in mortgage-backed securities over the
2022-2032 period. The guarantee fee was established in 2011 and is scheduled to expire in 2021. CBO
considers Fannie Mae and Freddie Mac to be governmental entities."
https://www.cbo.gov/publication/57406
Of course the gses are governmental entities because they have been nationalized, someone should tell the clueless Sovereign Credit Rating companies S&P, Fitch, and Moodys to include up to $7.2T of LIABILITIES on the federal government balance sheet!
We could create a 501(c)(3) non profit with a very narrow mission (e.g., to protest defacto nationalizations by the federal government in government sponsored enterprises) and protest regularly in front of 3 key locations:
1. FHFA HQ
2. UST
3. Federal Courts when cases are on the docket
Instead of bitchin and moanin' amongst ourselves we could at least do it where major governmental decision makers can hear us.
We know from Collins that unconstitutional actions by the FHFA are not protected conduct and we can sue the FHFA for a list of the list of the guesstimated 8,000 to 10,000 shareholders of record, in the event the FHFA refuses to fork over the information.
What do you think?
No that's right it's usually always more fun to spend than to save as those are the only two things one can do with wealth. I'd rather see a quicker resolution of this most bizarre investment but I also am rooting for Uncle Suggy to do the right thing. We'll see what the almighty OZ decides to do in the end but it could take longer than some anticipated due to Uncle Suggy's inability to realize its errant ways. GLTUA!
Do you know what else is bizarre? A 25% intraday swing in jps prices (ignore the man behind the curtain!):
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1