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6 mil volume. I wonder how many bears were trapped in 15 minutes
Harsh rejection at $4.02
Could be quite a bear trap later
Gap filled
A U.S. Treasury Department spokesman referred a request for comment to the Justice Department, which declined to comment. An FHFA spokeswoman didn’t immediately reply to a request for comment.
“We are delighted that the court has made clear that the net worth sweep will not be allowed to stand,” the shareholders’ lawyer, David Thompson, said of Friday’s ruling.
Subduing the Housing Godzillas
The Trump Treasury has some good ideas for shrinking Fan and Fred
By
The Editorial Board
Sept. 9, 2019 7:10 pm ET
The Trump Administration last week sketched out an ambitious plan to rein in mortgage monsters Fannie Mae and Freddie Mac and release them from government captivity. Godspeed to Federal Housing Finance Agency (FHFA) director Mark Calabria, who’s unlikely to get help from Congress in this Sisyphian task.
After devouring $190 billion from taxpayers to stay alive in 2008, Fannie and Freddie have.... teaser now you must pay
https://www.wsj.com/amp/articles/subduing-the-housing-godzillas-11568070632
No wonder you use up your posts
Thanks
So...you fell in love with a stock. So much in love that you have taken years of abuse. I know how you feel.
Go FnF!
Kthomp, do you think that the latest stress test results will have an effect on capital requirements? I have not read any posts addressing this.
Go FnF!
If you are paying them you are making money. I hope I have a boat load of capital gains to pay!
Go FnF!
They can call it a windfall or anything else the envious bastards want to call it, so long as we get it!
Go FnF!
More law suits!
Go FnF!
Where is Jack Ryan when you need him?
Well we can't talk about receivership. We can't talk about losing every law suit. We can't talk about staying in conservatorship. It seems we are desperate for something negative and unlikely to pump around here.
Reverse split! Your up!
Go FnF!
My opinion is that they will not be able to exercise. They were paid in full. Plus 40 billion plus lawsuit awards.
Go FnF
Didn't en banc conclude that treasury was paid back and more? Or was that Bradgord?
Go FnF!
But I have done it too! LOL
In our housing finance system, everyone is in favor of the wrong thing
?(iStock/Getty Images/iStockphoto)
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By Charles Lane
Opinion writer
September 9, 2019 at 7:26 PM EDT
“We make plans; God laughs,” says a wise Yiddish proverb. And when we make plans to reform the U.S. housing finance system, God laughs hysterically.
Or so one supposes, given the history of efforts to overhaul the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, a.k.a. Fannie Mae and Freddie Mac, since the federal government seized the two giant mortgage enterprises during the nationwide housing crash in September 2008.
The entities’ de facto nationalization, and the ensuing $190 billion bailout, revealed basic design flaws; yet for almost a decade, Congress and the executive branch have been unable to legislate a permanent replacement.
The most recent symptom of this failure is the Trump administration’s blueprint, unveiled last week, which would basically keep Fannie and Freddie in business, with some modifications.
Why the impasse? The problem is the U.S. homebuyer’s attachment to the 30-year, fixed-rate mortgage. Over generations, Americans have been trained — by bankers, developers, real estate agents, affordable housing advocates and politicians — to treat this particular loan instrument as some sort of naturally occurring financial phenomenon, the benefits of which they are entitled to enjoy.
The truth is that the United States is the only major industrial country where such a loan dominates the market, due to the heavy hand of government.
Left to their own devices, lenders are understandably disinclined to let households have their money for three decades, during which the value of the collateral (a house) might or might not increase, the borrower might or might not default, and the bank might miss one or more opportunities to get more interest for that pile of cash.
Those pitfalls, from the bank’s point of view, are known as “credit risk” and “interest rate risk,” and in most of the United States’ peer countries, lender and homebuyer share them, like grown-ups, through 15-year loans or five-year adjustable-rate mortgages — with prepayment penalties to discourage refinancing.
Only in the United States did the government take the credit and interest rate risk, albeit through the extremely complicated, non-transparent means of creating Fannie and Freddie to buy up mortgages, package them into securities and sell them to investors — who paid top dollar because they carried an implicit federal guarantee.
The subsidy is what has enabled financial institutions to offer affordable 30-year loans to the U.S. masses.
Neither Congress nor the president dares question the 30-year, fixed-rate loan. Rather, the price of admission to the reform debate has been a pledge to perpetuate it. Even the current Federal Housing Finance Agency director, Mark Calabria, a trenchant critic of the 30-year, fixed-rate mortgage before his appointment, has had to pay homage.
Calabria and the rest of the Trump team thus find themselves reinventing the wheel in housing finance and calling it reform. The U.S. taxpayer shares the risk of a repeat, some day, of the 2008 housing meltdown.
https://beta.washingtonpost.com/opinions/in-our-housing-finance-system-everyone-is-in-favor-of-the-wrong-thing/2019/09/09/0f38f476-d31b-11e9-9610-fb56c5522e1c_story.html?outputType=amp
Some of you must be dying to do the math on the recap after the en banc decisions.
I will wait patiently.
Go FnF!
See? Everybody knows that it is all theatrics!
Go FnF!
I would think not since the twins need recap money.
Let's see if we are viciously rejected at $4ish.
Go FnF!
But then again we could gap at open.
Bottom line is with this stock the sooner the better and don't sweat the swings. Not to tease you but if you had jumped in Friday you wouldn't have any money to buy more. You just hold tight and watch the show.
I like it
For now
Go FnF!
It is all scripted and the actors can not say their lines in the wrong act of the play. This is not a perfect storm of coincidences. Everything is being presented in a predetermined order. Maybe there will be some Sweeney action soon so that it looks like the administration is backed into a corner since they can not count on legislation. The Trump administration can look like it has no choice but to take it's medecine. I have run out of metaphors for now.
Go FnF!
I like my Fannie shaken not stirred .
Go FnF
Hey I like that
A lot
Go FnF!
But isn't it nice to be all in and just ride the express?
Go FnF!
Yank what was this Sweeney release on orals? Somehow I missed this.
Now maybe we can find out if treasury can keep the huge money that FnF won suing TBTF!
How can they keep it now? I mean legally.
Go FnF!
Hi Straightline! What a day! Thank you for all your help!
Go FnF!
Mana? These guys?
Seems like somebody sold or is short. Either way long and strong is the wise move!
Go FnF!
Moody's sees Fannie, Freddie privatization plan as 'credit negative'
(Reuters) - Moody's Investors Services believes the U.S. Treasury Department's proposal to bring Fannie Mae and Freddie Mac out of conservatorship raises their credit risk as it would shrink their role in U.S. housing market.
The Treasury said last Thursday the government should draw up a plan to begin recapitalizing the mortgage finance agencies, while calling on Congress to act on comprehensive housing reform.
"If implemented, proposals to reform the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, would be credit negative for the companies' creditors," the rating agency said in a report released on Monday.
The government seized control of the two GSEs during the 2008 financial crisis with a $191.5 billion bailout.
"We believe the conservatorship enhances the credit market's confidence in the GSEs, strengthens the GSEs' corporate governance and increases the likelihood of federal backing," Moody's analysts wrote in the report.
A release from conservatorship without legislation would be credit negative for GSEs' creditors, the analysts said.
Moody's analysts, meanwhile, said the Treasury's proposal, if implemented, would level the playing field for private guarantors of mortgages and improve the credit quality of GSE credit-risk transfer securities
https://mobile.reuters.com/article/amp/idUSL2N26016X
Fannie, Freddie Getting Closer to Retaining Their Earnings
Treasury secretary says agreement would be ‘a step in the right direction’
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Treasury Secretary Steven Mnuchin said of Fannie and Freddie: ‘They’ve been in conservatorship for too long.’ PHOTO: SHAWN THEW/SHUTTERSTOCK
By
Kate Davidson
Updated Sept. 9, 2019 3:17 pm ET
SHARE
TEXT
Treasury Secretary Steven Mnuchin said Monday he expects an agreement soon to allow Fannie Mae and Freddie Mac to begin retaining their earnings, one of the first steps in the administration’s plan to return the mortgage-finance companies to private hands.
The Treasury has been in negotiations with the Federal Housing Finance Agency, Fannie and Freddie’s regulator, on an agreement, which would represent “a significant increase in capital and a step in the right direction to us ultimately raising third-party capital,” Mr. Mnuchin said in an interview on Fox Business Network.
Fannie and Freddie shares traded up more than 30% and were on pace for their best day in almost three years. They traded on heavier-than-usual volume following Mr. Mnuchin’s comments and a Friday evening court ruling that was favorable to investors.
The government assumed control of the firms in 2008, during the height of the financial crisis, to prevent their failure, which officials’ feared would trigger a broader collapse in the housing market. Since then, the firms have been transferring their profits to the Treasury.
Asked how soon the firms would be removed from conservatorship, Mr. Mnuchin said the government was focused first on building up the firms’ capital. “As part of housing reform, we do want to make sure that there is real capital in front of taxpayers,” he said.
“They’ve been in conservatorship for too long, and we want to make sure they’re not in conservatorship on a permanent basis,” he added.
Mr. Mnuchin said the agency intends to work with Congress and hopes to win congressional support in the next three months to six months, but is prepared to move ahead on administrative changes to the firms that don’t require legislative approval.
An appellate court on Friday overturned a ruling that supported the government’s decision in 2012 to sweep all the mortgage-finance giants’ profits to the Treasury Department. The Fifth Circuit Court of Appeals in New Orleans said the investors can now pursue their claims at a trial court.
Asked whether the Treasury intended to cancel its planned profit sweep for September following the legal ruling, Mr. Mnuchin demurred.
“The Treasury has very significant claims for the money that we’ve outlayed,” he said. “We’re in the process of working with the FHFA. We’re going to see if we can do it in September. If not, it would be very soon after that.”
Fannie and Freddie have paid an average $18.2 billion annually over the past three years to the Treasury. Reducing those payments will add to a widening budget deficit that is on track to exceed $1 trillion a year, amid higher government spending, rising interest costs and weaker revenue collection as a share of the economy.
Separately, Mr. Mnuchin said he viewed the resumption of trade talks with China as a sign of good faith. Negotiating teams from both sides are set to meet in Washington this month, with the principal negotiators meeting in early October.
“If we can get a good deal, a deal that’s good for us, we’ll sign it. If not, the president is perfectly fine with continuing the tariffs, which are raising significant amounts of money for the U.S. Treasury,” he said.
He dismissed the suggestion that tariffs are weighing on the U.S. economy and said he doesn’t see a recession looming.
Federal Reserve officials have increasingly warned about the risks to the economic outlook from escalating trade tensions, and are expected to lower interest-rates at their policy meeting later this month.
—Andrew Ackerman contributed to this article.
Write to Kate Davidson at kate.davidson@wsj.com
https://www.wsj.com/articles/mnuchin-expects-treasury-fhfa-pact-soon-to-let-fannie-freddie-begin-to-retain-their-earnings-11568035942
Wall Street Hails Fannie-Freddie Court Win, Mnuchin Plan
Bloomberg) -- Fannie Mae and Freddie Freddie Mac surged to their highest levels since February 2017 as analysts weighed in with an optimistic assessment after a double blast of good news rekindled this year’s rebound.
Fannie and Freddie shares both rallied as much as 35%, reaching session highs in afternoon trading, after Treasury Secretary Steven Mnuchin said he expects a deal on the government-sponsored enterprises retaining earnings soon and as Compass Point upgraded them after shareholders won in court. With Monday’s gains, both stocks have more than doubled this year.
A sense of “urgency” is taking hold in Washington after federal appeals court judges overturned a ruling that backed the government’s right to take all of the companies’ profits and concluded that structure of the Federal Housing Finance Agency, or FHFA, which regulates the two mortgage giants, is unconstitutional, Compass Point analyst Isaac Boltansky said by email. That urgency was evident during Mnuchin’s interview with Fox Business where he stated that “now is the time to recapitalize” the GSEs, Boltansky said.
Investors and analysts will keep a close eye on testimony from Mnuchin and FHFA director Mark Calabria on housing finance reform at a Sept. 10 Senate Banking Committee hearing.
Here’s a sample of some of the latest commentary:
Compass Point, Isaac Boltansky
“If the ruling stands, then the election next November stands as a de facto deadline for administrative action and nothing catalyzes action in Washington quite like a deadline,” Boltansky said. “As we see it, the near-term road map is becoming clearer with a letter agreement allowing some degree of capital retention as early as this month, a PSPA amendment in the fourth quarter or first quarter of 2020, and additional administrative steps in 2020.” PSPA refers to “senior preferred stock purchase agreements.”
Earlier, Compass Point raised Fannie and Freddie common shares to buy from neutral after the Fifth Circuit decision delivered shareholders a “significant victory that will almost certainly influence the forthcoming administrative reform effort,” analyst Chris Gamaitoni wrote in a note.
Bloomberg Intelligence, Elliott Stein
“Though Mnuchin wouldn’t comment on the court case, we think the Sept. 6 court ruling in the 5th Circuit undercuts the legality of the sweep of Fannie Mae and Freddie Mac profits to Treasury, while boosting GSE shareholders’ leverage in anticipated negotiations to end it and eliminate some or all of Treasury’s senior preferred liquidation preference. The decision also makes it easier for a president to fire the FHFA and CFPB director without cause.”
KBW, Brian Gardner
The court decision was only a “partial victory for GSE shareholders,” Gardner cautioned in a note. “Despite being one of the shareholders’ few wins in court, we urge investors not to overreact to the headlines.”
That’s because “the decision was a mixed bag and increases the chances that the litigation reaches the U.S. Supreme Court since there apparently will be a split among different federal appellate courts -- something the Supreme Court will want to resolve.”
“The case is still far from settled and we think the government could still prevail on the merits,” he said.
Cowen, Jaret Seiberg
“Tuesday’s Senate Banking hearing is the critical next step in the push for Fannie and Freddie to exit conservatorship,” Seiberg wrote. “We will watch the reaction of Democrats, especially if Elizabeth Warren attends.”
“That becomes even more important as the Fifth Circuit decision on Friday gives a new president the right to replace the FHFA director. So a Democratic win in 2020 could impact recap and release.”
“Recap and release” refers to the process of bolstering Fannie and Freddie’s ability to absorb losses and then returning them to private shareholder ownership.
(Updates share trading in second paragraph.)
To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer
https://finance.yahoo.com/amphtml/news/fannie-freddie-soar-wall-street-145822002.html
Looks like the cherry picking is over. This fannie is getting more expensive
Go FnF!
Detearing started it years ago.
$3.60 HOD RIGHT NOW!
Lordy Lordy I would hate to be Shorty!
Go FnF!