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.
Fannie Mae (FNMA) report for last two weeks to 10/02/19
VOLUME INDICATORS: FNMA saw an accumulation-distribution index of 126.54545, an on-balance volume of 3.8, chaikin money flow of 34.0 and a force index of 0.0104. There was an ease of movement rating of -0.00116, a volume-price trend of 0.91186 and a negative volume index of 1000.0.
VOLATILITY: FNMA had an average true range of 0.11778, bolinger bands of 3.93941, an upper bollinger band of 3.26059, lower bollinger band of 3.48, a bollinger high band indicator of 1.0, bollinger low band indicator of nan, a central keltner channel of 3.70667, high band keltner channel of 3.68667, low band keltner channel of 3.72667, a high band keltner channel indicator of 1.0 and a low band keltner channel indicator of 1.0. There was a donchian channel high band of 3.48, a donchian channel low band of 3.48, a donchian channel high band indicator of 1.0, and a donchian channel low band indicator of 1.0.
TREND: FNMA had a Moving Average Convergence Divergence (MACD) of 0.00538, a MACD signal of 0.00299, a MACD difference of 0.00239, a fast Exponential Moving Average (EMA) indicator of 3.48, a slow Exponential Moving Average (EMA) indicator of 3.48, an Average Directional Movement Index (ADX) of unknown, an ADX positive of 20.0, an ADX negative of 20.0, a positive Vortex Indicator (VI) of 1.0, a negative VI of 1.0, a trend vortex difference of 0.25427, a trix of 18.44661, a Mass Index (MI) of 1.0, a Commodity Channel Index (CCI) of 66.66667, a Detrended Price Oscillator (DPO) of -0.6985, a KST Oscillator (KST) of 251.12349 and a KST Oscillator (KST Signal) of 251.12349 (leaving a KST difference of 21.57109). We also found an Ichimoku rating of 3.82, an Ichimoku B rating of 3.82, a Ichimoku visual trend A of 3.00285, an Ichimoku visual trend B of 3.12645, an Aroon Indicator (AI) up of 4.0 and an AI indicator down of 4.0. That left a difference of 4.0.
MOMENTUM: FNMA had a Relative Strength Index (RSI) of 50.0, a Money Flow Index (MFI) of 100.0, a True Strength Index (TSI) of 100.0, an ultimate oscillator of 67.91444, a stochastic oscillator of 1750.0, a stochastic oscillator signal of 1750.0, a Williams %R rating of 1650.0 and an awesome oscillator of 0.00617.
RETURNS: There was a daily return of 25.11235, a daily log return of 6.66914 and a cumulative return of 6.89655.
Mortgage-finance companies Fannie Mae and Freddie Mac are expected to start keeping their profits again, The Wall Street Journal reported Sunday. The move puts on hold a yearslong arrangement in which the companies handed nearly all of their earnings to the Treasury Department. In an expected agreement between the Trump administration and the companies' federal regulator, this would be an initial major step in allowing Fannie and Freddie to build up capital so they can operate as private companies again. The government effectively nationalized them during the 2008 housing crisis. Shares of Fannie Mae gained 2.6% Monday, while Freddie Mac added 2.5%.
Preferred vs. Common FNMA Shares
Most preferred trade for 1/4 of liquidation value or less representing upside of 300% in an ideal scenario. Unlike the common shares, the preferred shares have a fixed liquidation value protecting them from potential share dilution that could result from several possible reasons
In Common shhares, the share value would come down to the multiple the market places on the stock. If released from conservatorship, Ackman figures shares to be worth $23 at least while Dick Bove values them at $18 each. Either way, in a case where earnings fall lower from current levels and the warrants are exercised, common shares have over 500% potential upside.
I'm not sure how they figured commons at that price, I've come up with $35.50 as the minimum.
Trilson, Fannie Mae reminds me of best investment ever
September 25, 2019 10:22 AM ET (BZ Newswire) -- Analyst Color
Since former hedge fund manager Whitney Tilson made a bullish call on Federal National Mortgage Association (OTC:FNMA) and Federal Home Loan Mortgage Corp (OTC:FMCC) on Sept. 5, the two stocks are each up more than 40%.
In his newsletter this week, Tilson reiterated his bullish stance that GSE shares are underpriced and said Fannie Mae reminds him of his best investment ever, General Growth Properties.
Background
Since 2012, every cent of earnings by Fannie and Freddie have gone directly to the Treasury as part of their ongoing conservatorship. Earlier this month, however, an appellate court overturned a previous ruling upholding the legality of the Treasury’s “net worth sweep” of Fannie and Freddie’s profits.
Shortly thereafter, Treasury Secretary Steven Mnuchin said the Treasury is negotiating with the Federal Finance Housing Agency, and expects a deal to end the net worth sweep “by the end of the month.”
Mnuchin told the Senate Banking Committee that his proposal would be to allow Fannie and Freddie to recapitalize their balance sheets in exchange for a fee paid to the Treasury for its ongoing support throughout the process.
Tilson’s Take
Tilson said Fannie Mae reminds him of General Growth Properties because GGP filed for bankruptcy not because of insolvency, but because of illiquidity.
Tilson bought GGP stock for 67 cents per share in early 2009 shortly before the company was forced into bankruptcy because it was unable to pay its debts. At the same time, Tilson said GGP’s mall properties continued to generate plenty of cash flow throughout the crisis.
“Thus, even though the company wouldn't emerge from bankruptcy until November 2010, investors bid the stock up once the panic passed because they could see the value of the underlying business above and beyond its debt,” Tilson said in his newsletter.As the share price rose, it became easier for the company to raise capital via equity offerings because it could sell shares at a higher price.
“I think we're at the beginning of a similar virtuous cycle for the GSEs,” Tilson said this week.
Benzinga’s Take
After more than a decade in limbo, the long-term outlook for Fannie investors has significantly improved in the past month. At this point there are still plenty of unanswered questions about the details of the recapitalization plan, including the fees, the timeline and the potential dilution involved in the process.
Do you agree with this take? Email feedback@benzinga.com with your thoughts.
FHFA formally ends mortgage volume discounts from Fannie Mae, Freddie Mac
Federal Housing Finance Agency Director Mark Calabria recently issued a formal directive to end guarantee fee discounts for high-volume lenders from Fannie Mae and Freddie Mac.
The FHFA explained that it is attempting to "level the playing field" for smaller lenders, and is making this a priority in housing finance reform.
“We trying to make sure Fannie and Freddie aren’t driving consolidation in the market, but instead they’re providing a level playing field, and that’s really something we’re focused on,” Calabria said Monday at a National Association of Federally Insured Credit Unions conference.
The FHFA explained that since the housing crisis in 2008, the agency has worked to maintain a level playing field for small- to mid-sized financial institutions.
“One of the things that really concerned me before the crisis was that it wasn’t unusual where the big guys like Countrywide would come in and they pay G-fees down here and you come in and pay G-fees up here,” Calabria said, referring to smaller lenders paying higher G-fees than larger lenders at certain points in the past.
But now, the director issued a formal directive to end volume discounts, which will be monitored by regular compliance reporting.
“To that end, FHFA, as conservator, has communicated to Fannie Mae and Freddie Mac that they will not provide volume discounts to larger market players,” an FHFA spokesperson told HousingWire. “Further, the instructions state that FHFA will monitor the enterprises’ compliance through regular reporting. This communication formalizes previous guidance set out in the Enterprises’ 2012 Conservatorship Scorecard.”
And the FHFA plans to ensure this level playing field is kept even after Fannie and Freddie are released from conservatorship. In its recent Housing Finance Reform plan, the Department of the Treasury recommended that volume-based pricing discounts or similar incentives should be prohibited.
“FHFA’s approach is based on this principle: same rate of return for the same risks regardless of size,” the FHFA spokesperson continued. “This supports equitable access for small lenders while appropriately allowing for guarantee fees to reflect the differences that may exist in the risk profiles among lenders of different size.”
Why do you think it's funny, it's all accurate and it's what I do on all my stocks
Reprting for Fannie Mae FNMA 2019-09-23
VOLUME INDICATORS: We saw an accumulation-distribution index of 101.96044, an on-balance volume of -3.87, chaikin money flow of 1.61538 and a force index of 0.0084. There was an ease of movement rating of -0.00217, a volume-price trend of 1.64387 and a negative volume index of 1000.0.
VOLATILITY: We noted an average true range of 0.10111, bolinger bands of 4.4151, an upper bollinger band of 2.6049, lower bollinger band of 3.83, a bollinger high band indicator of 1.0, bollinger low band indicator of nan, a central keltner channel of 3.9, high band keltner channel of 3.77, low band keltner channel of 4.03, a high band keltner channel indicator of 1.0 and a low band keltner channel indicator of 1.0. There was a donchian channel high band of 3.83, a donchian channel low band of 3.83, a donchian channel high band indicator of 1.0, and a donchian channel low band indicator of 1.0.
TREND: We calculated a Moving Average Convergence Divergence (MACD) of -0.01436, a MACD signal of -0.00798, a MACD difference of -0.00638, a fast Exponential Moving Average (EMA) indicator of 3.83, a slow Exponential Moving Average (EMA) indicator of 3.83, an Average Directional Movement Index (ADX) of unknown, an ADX positive of 20.0, an ADX negative of 20.0, a positive Vortex Indicator (VI) of 1.0, a negative VI of 1.0, a trend vortex difference of 0.32135, a trix of 32.57256, a Mass Index (MI) of 1.0, a Commodity Channel Index (CCI) of -66.66667, a Detrended Price Oscillator (DPO) of -1.1296, a KST Oscillator (KST) of 418.3084 and a KST Oscillator (KST Signal) of 418.3084 (leaving a KST difference of -59.25048). We also found an Ichimoku rating of 3.935, an Ichimoku B rating of 3.935, a Ichimoku visual trend A of 2.92842, an Ichimoku visual trend B of 3.0597, an Aroon Indicator (AI) up of 4.0 and an AI indicator down of 4.0. That left a difference of -4.0.
MOMENTUM: We found a Relative Strength Index (RSI) of 50.0, a Money Flow Index (MFI) of 100.0, a True Strength Index (TSI) of 100.0, an ultimate oscillator of 96.58003, a stochastic oscillator of 130.76923, a stochastic oscillator signal of 130.76923, a Williams %R rating of 30.76923 and an awesome oscillator of 0.00533.
RETURNS: There was a daily return of 41.83084, a daily log return of -18.28439 and a cumulative return of -16.71018.
Mortgage-finance companies Fannie Mae and Freddie Mac are expected to start keeping their earnings as early as this week, pausing a yearslong arrangement in which they handed nearly all of their profits to the Treasury Department .
The move, in an expected agreement between the Trump administration and their federal regulator, would be an initial major step in allowing the companies to build up capital so they can operate as private companies again.
Under the forthcoming agreement, the companies would be allowed to retain about a year's worth of profits, or about $20 billion , Mark Calabria , the Federal Housing Finance Agency chief, said in an interview after touring a senior center financed in part by the Federal Home Loan Bank of Indianapolis . FHFA oversees Fannie, Freddie and the Federal Home Loan Bank system.
"We're still in the middle of negotiations with Treasury, but I think we're close," Mr. Calabria said. "I hope to have it done by the end of the month."
Fannie and Freddie are central players in the housing market, buying about half of all U.S. mortgages from lenders and packaging them for issuance as securities. The government effectively nationalized them during the 2008 crisis in a bid to stabilize the housing market as mortgage defaults mounted. How the government addresses the companies' future could resolve the last major problem from the financial crisis.
At present, the companies hold just $3 billion each in capital, and the agreement under consideration would substantially increase that figure. The move would be significant because it would start a process of the companies raising a combined $100 billion -plus that they will likely need to hold before they can return to private hands.
"If you're leveraged 1,000-to-1, you could have Superman as your regulator and Wonder Woman as your CEO, and you're still going to fail at some point," Mr. Calabria said.
The timing of the agreement and the precise amount of earnings the companies would be allowed to retain hasn't been completed. The overall deal could slip to the end of the year, he said.
Every quarter Fannie and Freddie send nearly all of their profits, minus the $3 billion they are currently permitted to retain as capital, to the Treasury Department as payment for their ongoing support from the department. Under the terms of the 2008 conservatorship, the firms have access to more than $250 billion in support, though they have been generally profitable in recent years and have drawn on that support only once since 2012. Should the companies report a loss going forward, they could continue to draw on their support from the government. They just wouldn't send their profits to Treasury until they had retained more than about $20 billion in profits.
The upcoming change comes after a federal appellate court in New Orleans criticized the profit sweep in a Sept. 6 ruling. The decision, in litigation brought by investors in the companies, gave new life to court challenges over the handling of Fannie and Freddie's profits. The administration is deciding whether to appeal.
The Trump administration wants to recapitalize the companies through a mix of retained earnings and raising tens of billions of dollars from investors, a process likely to take years. It is a priority for the administration, which outlined a path to return the firms to private ownership earlier this month.
"They've been in conservatorship for too long, and we want to make sure they're not in conservatorship on a permanent basis," Treasury Secretary Steven Mnuchin said in a Sept. 9 interview on Fox Business Network.
Any move now to pause the profit sweep would give Treasury and the FHFA time to negotiate bigger changes to the terms of the companies' existing support agreement with Treasury, Mr. Calabria said. That includes the creation of a fee the companies' would be required to pay in exchange for ongoing support from Treasury, which is necessary for their business model. The broader changes could also encompass new restrictions on the companies' activities, as envisioned by the recent Treasury report, which urged FHFA to scrutinize the firms' purchases of cash-out refinancings and loans for investment and vacation properties.
Meanwhile, Mr. Calabria said, taxpayers would receive additional shares in the companies -- the equivalent of new stakes in a firm preparing to launch an initial public offering -- in exchange for allowing the companies to retain earnings now.
Through June, the companies have paid about $300 billion in dividends to the Treasury, while taking some $190 billion from taxpayers in the years after the 2008 financial crisis. The companies have paid an average $18.2 billion annually over the past three years to the Treasury.
Reducing those payments would add to a widening U.S. budget deficit that is on track to exceed $1 trillion a year.
The government seized the companies during the George W. Bush administration, and agreed to inject money to support some $5 trillion in debt securities issued by the companies.
I've a friend that I went to college with that works on the floor of the exchange in NY, he said a very well known investor bought 1 Million shares of common FNMA yesterday. He can't tell me who the investor is though.
U.S. Housing Supply a 'Major Challenge' Says Former Fannie Mae CEO
Sep.20 -- Tim Mayopoulos, Blend president and former Fannie Mae chief executive officer, discusses the U.S housing market on "Bloomberg Markets: The Close."
Video link
https://finance.yahoo.com/video/u-housing-supply-major-challenge-105639013.html
Fannie had a public hearing yesterday in VA @ 1:00, doe's anyone know what it was for?
That is now the most #@!#! post I've read on this board!
FANNIE MAE Public Hearing 13162819 Thursday, September 19, 2019 1:00 PM (EDT) ALEXANDRIA, VA
What is this hearing about today???
REPORT FOR FNMA 2019-09-17 How Fannie Mae (FNMA) has been trading over the last 2 weeks and the past day especially. On its latest session, Fannie Mae (FNMA) opened at 3.84, reaching a high of 4.0 and a low of 3.68 before closing at a price of 4.0. There was a total volume of 21182394.
VOLUME INDICATORS: We saw an accumulation-distribution index of 16.608, an on-balance volume of -3.84, chaikin money flow of 3.0 and a force index of 0.0688. There was an ease of movement rating of 0.00885, a volume-price trend of 1.56537 and a negative volume index of 1000.0.
VOLATILITY: We noted an average true range of 0.09232, bolinger bands of 3.72571, an upper bollinger band of 3.58429, lower bollinger band of 3.68, a bollinger high band indicator of 1.0, bollinger low band indicator of nan, a central keltner channel of 3.84, high band keltner channel of 3.68, low band keltner channel of 4.0, a high band keltner channel indicator of 1.0 and a low band keltner channel indicator of 1.0. There was a donchian channel high band of 3.68, a donchian channel low band of 3.68, a donchian channel high band indicator of 1.0, and a donchian channel low band indicator of 1.0.
TREND: We calculated a Moving Average Convergence Divergence (MACD) of -0.00112, a MACD signal of -0.00062, a MACD difference of -0.0005, a fast Exponential Moving Average (EMA) indicator of 3.68, a slow Exponential Moving Average (EMA) indicator of 3.68, an Average Directional Movement Index (ADX) of unknown, an ADX positive of 20.0, an ADX negative of 20.0, a positive Vortex Indicator (VI) of 1.0, a negative VI of 1.0, a trend vortex difference of 0.54871, a trix of 30.84713, a Mass Index (MI) of 1.0, a Commodity Channel Index (CCI) of -66.66667, a Detrended Price Oscillator (DPO) of -1.0319, a KST Oscillator (KST) of 389.67562 and a KST Oscillator (KST Signal) of 389.67562 (leaving a KST difference of -4.72037). We also found an Ichimoku rating of 3.92, an Ichimoku B rating of 3.92, a Ichimoku visual trend A of 2.8657, an Ichimoku visual trend B of 2.99025, an Aroon Indicator (AI) up of 4.0 and an AI indicator down of 4.0. That left a difference of -4.0.
MOMENTUM: We found a Relative Strength Index (RSI) of 50.0, a Money Flow Index (MFI) of 100.0, a True Strength Index (TSI) of 100.0, an ultimate oscillator of 86.57606, a stochastic oscillator of 200.0, a stochastic oscillator signal of 200.0, a Williams %R rating of 100.0 and an awesome oscillator of -0.03417.
RETURNS: There was a daily return of 38.96756, a daily log return of -1.36801 and a cumulative return of -1.3587.
AS OF 2019-09-17 Analysis of technical indicators for Fannie Mae (FNMA) is telling us that this is worth holding.
REPORTING FOR FNMA 2019-09-16 We have conducted a deep analysis of how Fannie Mae (FNMA) has been trading over the last 2 weeks and the past day especially. On its latest session, Fannie Mae (FNMA) opened at 3.65, reaching a high of 3.85 and a low of 3.63 before closing at a price of 3.84. There was a total volume of 19601331.
VOLUME INDICATORS: We saw an accumulation-distribution index of 11.30175, an on-balance volume of -3.57, chaikin money flow of 1.2 and a force index of 0.1768. There was an ease of movement rating of 0.00359, a volume-price trend of 1.45562 and a negative volume index of 1000.0.
VOLATILITY: We noted an average true range of 0.09404, bolinger bands of 3.73056, an upper bollinger band of 3.41944, lower bollinger band of 3.63, a bollinger high band indicator of 1.0, bollinger low band indicator of nan, a central keltner channel of 3.71, high band keltner channel of 3.51, low band keltner channel of 3.91, a high band keltner channel indicator of 1.0 and a low band keltner channel indicator of 1.0. There was a donchian channel high band of 3.63, a donchian channel low band of 3.63, a donchian channel high band indicator of 1.0, and a donchian channel low band indicator of 1.0.
TREND: We calculated a Moving Average Convergence Divergence (MACD) of -0.00247, a MACD signal of -0.00137, a MACD difference of -0.0011, a fast Exponential Moving Average (EMA) indicator of 3.63, a slow Exponential Moving Average (EMA) indicator of 3.63, an Average Directional Movement Index (ADX) of unknown, an ADX positive of 20.0, an ADX negative of 20.0, a positive Vortex Indicator (VI) of 1.0, a negative VI of 1.0, a trend vortex difference of 0.37581, a trix of 30.43418, a Mass Index (MI) of 1.0, a Commodity Channel Index (CCI) of -66.66667, a Detrended Price Oscillator (DPO) of -0.9945, a KST Oscillator (KST) of 377.34775 and a KST Oscillator (KST Signal) of 377.34775 (leaving a KST difference of -10.43445). We also found an Ichimoku rating of 3.75, an Ichimoku B rating of 3.75, a Ichimoku visual trend A of 2.84995, an Ichimoku visual trend B of 2.97625, an Aroon Indicator (AI) up of 4.0 and an AI indicator down of 4.0. That left a difference of -4.0.
MOMENTUM: We found a Relative Strength Index (RSI) of 50.0, a Money Flow Index (MFI) of 100.0, a True Strength Index (TSI) of 100.0, an ultimate oscillator of 98.02859, a stochastic oscillator of 110.0, a stochastic oscillator signal of 110.0, a Williams %R rating of 10.0 and an awesome oscillator of -0.03683.
REPORTING FOR FNMAM 2019-09-16 We have conducted a deep analysis of how Fannie Mae 5.81 H (FNMAM) has been trading over the last 2 weeks and the past day especially. On its latest session, Fannie Mae 5.81 H (FNMAM) opened at 22.95, reaching a high of 23.5 and a low of 22.95 before closing at a price of 23.25. There was a total volume of 31800.0.
VOLUME INDICATORS: We saw an accumulation-distribution index of 46.3, an on-balance volume of 23.05, chaikin money flow of 1.0 and a force index of 0.434. There was an ease of movement rating of -0.00054, a volume-price trend of 3.35609 and a negative volume index of 1000.0.
VOLATILITY: We noted an average true range of 0.43818, bolinger bands of 23.04571, an upper bollinger band of 22.90429, lower bollinger band of 22.95, a bollinger high band indicator of 1.0, bollinger low band indicator of 1.0, a central keltner channel of 23.13333, high band keltner channel of 22.58333, low band keltner channel of 23.68333, a high band keltner channel indicator of 1.0 and a low band keltner channel indicator of 1.0. There was a donchian channel high band of 22.95, a donchian channel low band of 22.95, a donchian channel high band indicator of 1.0, and a donchian channel low band indicator of 1.0.
TREND: We calculated a Moving Average Convergence Divergence (MACD) of 0.00112, a MACD signal of 0.00062, a MACD difference of 0.0005, a fast Exponential Moving Average (EMA) indicator of 22.95, a slow Exponential Moving Average (EMA) indicator of 22.95, an Average Directional Movement Index (ADX) of unknown, an ADX positive of 20.0, an ADX negative of 20.0, a positive Vortex Indicator (VI) of 1.0, a negative VI of 1.0, a trend vortex difference of 0.43856, a trix of 11.02331, a Mass Index (MI) of 1.0, a Commodity Channel Index (CCI) of 66.66667, a Detrended Price Oscillator (DPO) of -2.8968, a KST Oscillator (KST) of 144.45575 and a KST Oscillator (KST Signal) of 144.45575 (leaving a KST difference of 0.62334). We also found an Ichimoku rating of 23.225, an Ichimoku B rating of 23.225, a Ichimoku visual trend A of 20.89805, an Ichimoku visual trend B of 21.18555, an Aroon Indicator (AI) up of 4.0 and an AI indicator down of 4.0. That left a difference of 4.0.
MOMENTUM: We found a Relative Strength Index (RSI) of 50.0, a Money Flow Index (MFI) of 100.0, a True Strength Index (TSI) of 100.0, an ultimate oscillator of 100.0, a stochastic oscillator of 100.0, a stochastic oscillator signal of 100.0, a Williams %R rating of -1116.66667 and an awesome oscillator of -0.073.
WASHINGTON , Sept. 17, 2019 /PRNewswire/ -- As other parts of the economy begin to exhibit weakness, consumer spending – supported by continued worker compensation growth – remains the primary driver of the current economic expansion, according to the latest commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group . The strength in consumer spending led the ESR Group to up its forecast of third quarter 2019 GDP growth by one-tenth to 1.9 percent. However, a measure of consumer sentiment suggesting potential deterioration in second-half spending, along with weaker manufacturing data and further evidence that business investment is slowing due to geopolitical uncertainty, contributed to a downward revision to the ESR Group's headline growth forecast for 2020 to 1.6 percent. The Group still believes that the Fed will cut interest rates two more times in 2019 but notes risks remain biased to the downside, as trade tensions, a potential no-deal Brexit, and other concerns weigh on the markets.
The ESR Group maintains that mortgage demand remains on solid footing but notes that the lack of existing supply continues to limit home sales even as mortgage rates push new lows. The current low interest rate environment may be supportive of new construction, but the scarcity of existing home listings led the ESR Group to lower its existing sales growth forecast in 2019 to negative 0.3 percent. Total mortgage originations in 2019 are still expected to rise 11.6 percent year over year, due largely to another upward revision in projected refinance activity, which, according to the recently released Mortgage Lender Sentiment Survey ®, lenders now report as driving their surging profit margin outlooks.
Domestic economic data continue to paint a picture of generally positive fundamentals amid a backdrop of continued volatility and uncertainty," said Fannie Mae Senior Vice President and Chief Economist Doug Duncan . "Consumer spending remains the engine driving the economy forward, but faltering business investment and worrying downside risks, including the ongoing trade tensions between the U.S. and China , could become a heavier weight on growth. It appears the Fed is prepared to help insure against downside risks by easing further, and we're maintaining our forecast that the Committee will cut rates two more times in 2019 – this week and again in December.
The housing story remains primarily one of imbalance between demand and supply," continued Duncan. "Both our consumer and lender attitudinal surveys hit new highs this month due to near-historically low mortgage rates and generally favorable household balance sheets, but inventory constraints, particularly in the affordable space, continue to hold back housing market sales volume. Refreshingly, in the absence of existing stock, homebuilders appear to be increasingly focused on entry-level homes, as the median square footage of new single-family construction fell 4.3 percent in the second quarter.
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk.
The Federal Housing Finance Agency expands multifamily lending caps for the two government-controlled organizations
The Federal Housing Finance Agency will increase caps on the amount of multifamily loans Fannie Mae and Freddie Mac can purchase next year while also closing some loopholes.
The regulatory agency will now limit the two firms to purchasing $100 billion in multifamily-housing residential loans, respectively, between the fourth quarters of 2019 and 2020. The caps are substantially larger than in previous years. In 2018 and 2019, Fannie Mae (FNMA) and Freddie (FMCC) were only allowed to purchase $35 billion in multifamily loans each, however "mission-driven" loans excluded from the caps brought the total volume to $142.5 billion in 2018.
The FHFA began setting caps on Fannie and Freddie's multifamily businesses in 2014 in an effort to support liquidity in the multifamily market while also working to prevent private capital from being crowded out.
Beyond expanding the size of the caps, the FHFA also made other revisions to how Fannie and Freddie can conduct their multifamily businesses. In particular, the agency will now require the two firms to have over one third (37.5%) of their multifamily activities be directed toward affordable housing.
Read more:5 major changes the Trump administration wants to make to housing finance (http://www.marketwatch.com/story/ 5-major-changes-the-trump-administration-wants-to-make-to-housing-finance-2019-09-09)
This can include loans on properties subsidized by the Low Income Housing Tax Credit program, loans on developments created under inclusionary zoning rules, loans on properties covered by a Section 8 Housing Assistance Payment contract. Portions of loans can count on a pro-rata basis toward this requirement if a certain percentage of units within a multifamily development are considered affordable, based on the area's median income.
Furthermore, the new lending caps eliminate exclusions that allowed Fannie and Freddie to purchase loans in excess of the limits previously in place. Notably, the agency threw out a loophole that allowed Fannie and Freddie to buy green loans that were used to finance certain energy and water efficiency improvements without it counting toward their overall spending limits.
Between 2015 and 2017, Fannie and Freddie's share of new multifamily loans increased from 36% in 2015 to 49% in 2017, the FHFA said. Much of that growth was attributable to the green loans exclusion. Around half of the loans both firms purchased in 2017 and 2018 were excluded from the FHFA's lending caps.
The FHFA's choice to expand the lending caps -- while also closing the loopholes that allowed lending activity beyond them -- comes as the Trump administration called on the Treasury Department and the FHFA to consider limiting Freddie and Fannie's multifamily footprint as part of its broader plan (http://www.marketwatch.com/story/trump-administration- unveils-sweeping-plan-to-reform-housing-finance-system-2019-09-05)for housing finance reform.
I bought AA at .55, but it only went to $15.00 the day the court approved the merger, then the stock was halted until United merger was complete at a 3/1 ratio at $45.00
Treasury Secretary Mnuchin Details Plans for Fannie, Freddie
https://www.wsj.com/articles/mnuchin-top-administration-officials-to-testify-on-fannie-and-freddie-overhaul-effort-11568109601
Fannie, Freddie could not function without Treasury backing: Mnuchin
https://video.foxbusiness.com/v/6085010568001/#sp=show-clips
Hedge Funds Left Dizzy by Mnuchin’s Fannie-Freddie Musings
https://www.msn.com/en-us/news/money/hedge-funds-left-dizzy-from-mnuchin-e2-80-99s-musings-on-fannie-freddie/ar-AAH5Tth
Mnuchin considers appealing Fannie Mae, Freddie Mac investor lawsuit to the Supreme Court
https://www.cnbc.com/2019/09/10/fannie-mae-freddie-mac-win-could-be-appealed-to-supreme-court-mnuchin.html
Hope everyone was smart enough to put in stop orders this morning to protect gains
The hearing is over, but here's a link if you wanted to watch it
https://www.c-span.org/video/?464018-1/hud-secretary-carson-treasury-secretary-mnuchin-testify-housing-finance-reform
Be sure to watch Mnuchin hearing on CSPAN @ 10:00
Treasury Secretary Steven Mnuchin is scheduled to testify before the Senate Banking Committee on Tuesday, starting at 10 a.m. EDT , about his department's efforts to overhaul mortgage-finance giants Fannie Mae and Freddie Mac .
His testimony comes five days after the administration released a report calling for the privatization of the companies, 11 years after the government took them over through a process called conservatorship.
The Treasury chief will testify alongside Mark Calabria , the head of the Federal Housing Finance Agency , who will play a key role in any push to privatize the companies, and Ben Carson , the secretary of the Department of Housing and Urban Development .
Thursday's report generally avoided making specific policy recommendations, so Fannie and Freddie watchers hope the hearing will yield additional details about the government's plans. Here's what to look for:
Timing
The Treasury report provided no deadlines for the administration to take action on a series of suggestions, such as amendments to the companies' federal bailout agreement that would allow the firms to begin to accumulate profits instead of sweeping them to Treasury. Trump administration officials hope to curtail or end the existing profit sweep "well before the end of the year," a senior administration official told The Wall Street Journal on Monday. The move is seen as a first step in the administration's plan to return the mortgage-finance companies to private hands.
Shares of Fannie and Freddie surged on Monday after Mr. Mnuchin, in an interview on Fox Business Network, signaled his department was close to a deal with the FHFA, the companies' federal regulator, to allow them to begin retaining their earnings.
Support for Legislation
Trump administration officials say they are prepared to end the decadelong conservatorship on their own without legislation, but would prefer Congress act to broadly overhaul housing finance. Tuesday's hearing may signal whether lawmakers are in any mood to cut a deal, a heavy political lift as the 2020 campaign gets under way.
Analysts say an important signal will come from Democratic lawmakers, who remain divided on what to do with the companies. The most-recent legislative push fell apart two years ago because progressive Democrats declined to team up with moderates to support it.
Housing Role Reduction
Mr. Mnuchin told the Journal last week that he thinks Fannie and Freddie's role in housing should be curtailed. " Our view is that the government footprint has become too big," he said ahead of the report's release. Tuesday's testimony could shed additional light on how, exactly, the administration plans to reduce the size of the companies, which currently back about half of the $10 trillion housing market.
Court Ruling Response
Investors in Fannie and Freddie notched a win in their yearslong challenge to the U.S. sweep of nearly all of the mortgage-finance giants' profits, with a circuit court ruling they could now pursue their claims at a trial court. What happens next in that case, in which the Treasury and FHFA chiefs are named as defendants? They have declined to comment, so far.
Write to Andrew Ackerman at andrew.ackerman@wsj.com
administration's plan to return the mortgage-finance companies to private hands.
KEY FACTS
--- The Treasury has been in negotiations with the Federal Housing Finance Agency , Fannie and Freddie's regulator.
--- The agreement would represent an increase in capital and a step toward ultimately raising third-party capital.
--- Mnuchin said the agency intends to work with Congress and hopes to win congressional support.
--- Fannie and Freddie have paid an average $18.2bn 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.
--- This is amid higher government spending, rising interest costs and weaker revenue collection.
Why This Matters
Treasury secretary says agreement would be "a step in the right direction".
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.
A fuller story is available on WSJ.co
Shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) both shot up 14% in premarket trading Monday, after Treasury Secretary Steven Mnuchin said on Fox Business that an agreement between the Treasury and the Federal Housing Finance Agency soon that ends the Fannie and Freddie profit sweep. Mnuchin said the deal would allow the government-sponsored enterprises to begin retaining earnings. Fannie's stock tumbled 8.8% on Friday and Freddie's shares shed 8.2% after the Trump administration unveiled its plan for housing finance reform (http://www.marketwatch.com/story/fannie-mae-freddie- mac-stocks-sink-on-heavy-volume-after-trump-administration-plan-unveiled-2019-09-06), which included a recapitalization and ending the conservatorship (http://www.marketwatch.com/story/trump-administration-unveils-sweeping-plan-to-reform- housing-finance-system-2019-09-05) of the GSEs. Fannie shares have rallied 79.5% and Freddie's stock has climbed 71.3% over the past 12 months, while the S&P 500 has gained 3.7%.
Collins vs. Mnuchin September 6 Court Documents
http://www.ca5.uscourts.gov/opinions/pub/17/17-20364-CV2.pdf
250k just bought at $2.60
Everyone should contact Trump at the addresses below and let him know how you feel about his reform plan.
https://www.whitehouse.gov/contact/
https://www.donaldjtrump.com/contact/
Shares of Fannie Mae (FNMA) were plunged 13.5% and Freddie Mac (FMCC) plummeted 11.8%, after the Trump administration unveiled its plan for housing finance reform (http://www.marketwatch.com/story/trump-administration-unveils-sweeping- plan-to-reform-housing-finance-system-2019-09-05), including the recapitalization and ending the conservatorship of Fannie and Freddie. Trading volume topped 9.8 million shares for Fannie's stock, already more than double the full-day average of 4.7 million shares, and was about 3.7 million shares on Freddie's stock, nearly double the full-day average of about 1.9 million shares. "Although Treasury does not believe a Government guarantee is required, Treasury would support legislation that authorizes an explicit, paid-for guarantee backed by the full faith and credit of the Federal Government that is limited to the timely payment of principal and interest on qualifying mortgage-backed securities," the Treasury Department said. The selloff in Fannie and Freddie shares come after both more than doubled year to date, with Fannie's stock up 142.5% and Freddie's up 133.0% this year. In comparison, the Dow Jones Industrial Average rose 14.8% year to date.
FHL.MU
FED. HOME LN MTGE O.N.
2.7740 +0.2400 +9.47%
FNM.SG
FEDERAL NATIONAL MORTGAGE ASS.R
2.7990 +0.1690 +6.43%
FNM.BE
FED.NATL MTGE ASS.
2.8005 +0.0505 +1.84%
FHL.F
FED. HOME LN MTGE O.N.
2.7740 +0.1900 +7.35%
FHL.SG
FED. HOME LOAN MORTGAGE CORP. R
2.7000 +0.1500 +5.88%
Here's a link to the complete 53 page reform plan
https://home.treasury.gov/system/files/136/Treasury-Housing-Finance-Reform-Plan.pdf
Anyone know why Fox business has DOW futures at +88 and CNBC say +42
Covering a guy catching a cell phone gets more coverage than FnF
The media on these stock channels are doing a horrible job covering the release of Trumps plan.
WASHINGTON -- The Trump administration said it would support returning mortgage-finance giants Fannie Mae and Freddie Mac to private hands, a development that could keep the companies at the center of the housing market for decades to come.
The principles announced Thursday represent a major reversal from what leaders of both parties over the past decade promised -- to abolish the companies, which guarantee roughly half the U.S. mortgage market. The approach, which doesn't require approval by Congress , would mark an important win for investors who have been betting politicians wouldn't follow through on those promises.
Treasury officials said they would aim to privatize the government-controlled firms without making it tougher and more expensive for people to get mortgages. They generally avoided making specific policy recommendations on how to accomplish these goals in a report released Thursday.
They said they would work with federal regulators to flesh out the details on how to put Fannie and Freddie on a sounder financial footing as well as to curtail the firms' roles in housing finance. The process could take years to implement and won't affect existing mortgages.
"Our view is that the government footprint has become too big," Treasury Secretary Steven Mnuchin said in an interview ahead of Thursday's report. "There are people in Washington who are happy to leave this the way it is for another 10 or 20 years, and that's not us. We feel an obligation to try to fix this."
Fannie and Freddie don't make loans but instead buy them from lenders and package them into securities that are sold to other investors. Figuring out how to refashion the companies remains the largest single piece of unfinished business from the financial crisis. The government assumed control of the firms in 2008 during the height of the crisis to prevent their failure, which officials' feared would trigger a broader collapse in the housing market.
The report says the government would continue to backstop the companies after they are privatized, providing a line of credit in times of emergency, in return for a periodic fee.
If the administration follows through on privatizing the firms, they would essentially return to a status similar to before the financial crisis, with their effective duopolies intact, for lack of a better alternative.
Though privatizing Fannie and Freddie remains a top priority for the Trump administration, any steps to quickly curtail the government's role in housing could prove disruptive to the housing market just as the 2020 campaign gets under way.
Treasury officials minimized the risks, saying privatization will be slow and incremental and that they won't upend the availability of the popular 30-year fixed rate mortgage, a product ensured by Fannie and Freddie's business.
It also could be hard to meaningfully shrink the firms' housing footprint without affecting borrowing costs. The reason: If some mortgages are no longer bought by Fannie and Freddie, they would be bought by private investors who would demand higher interest rates because the loans wouldn't have government backing. Such backing is enjoyed by Fannie and Freddie.
"Investors will be much pickier and charge more for the loans they are willing to invest in," said Jim Parrott , a former Obama administration housing adviser who is now an industry consultant. "That's not to say we shouldn't consider reducing the government's role in places, but we should be honest about its impact."
Left unaddressed were several key questions, such as what to do with the government's large stakes in the firms and how, exactly, to build up their capital so they can operate as private companies again.
Treasury included few specifics for shrinking Fannie and Freddie's footprint in housing, though they suggested that their regulator, the Federal Housing Finance Agency , could limit the amount of multifamily mortgages that they are allowed to purchase.
Treasury also said FHFA should reassess whether the companies' purchases of cash-out refinancings and loans for investment and vacation properties align with the firms' core mission.
The department said the companies' future activities could be limited as a condition for their continued reliance on a federal backstop. The firms would pay an "appropriately priced" periodic fee for that support.
Fannie and Freddie got into trouble during the crisis because they took on an increasing amount of risk while using their political clout to beat back attempts to force them to hold more capital. They amassed huge investment portfolios to profit from the difference between their lower cost of capital -- a benefit of an implied federal guarantee because Congress created the firms -- and the rates they could earn on mortgages.
In the early 2000s, Wall Street firms raced ahead of Fannie and Freddie by packaging larger quantities of riskier loans that often weren't eligible for backing by the mortgage-finance giants. By 2005, Fannie and Freddie were losing market share and began loosening their own loan standards to compete, taking on more risks at what would later prove to be the worst possible time. By August 2008 , Treasury officials concluded the firms didn't have enough capital and feared what would happen if investors lost confidence in Fannie and Freddie.
In September of that year, the government seized the companies through a process known as conservatorship, during the George W. Bush administration. In return for injecting about $190 billion into the firms, the government created a new class of stock -- senior preferred shares -- that paid an annual 10% dividend, along with warrants to acquire nearly 80% of the firms' common stock. The Treasury revamped its bailout agreement in 2012 to require nearly all the firms' profits be swept to the federal Treasury in lieu of dividend payments on those preferred shares. Some investors filed suit over the change.
Trump administration officials say they are compelled to act because the conservatorship was meant to be temporary. They also say the government should cease playing a central role in housing, a massive sector that touches on some 15% of the economy.
In recent years, Fannie and Freddie's strong profits have more than made taxpayers whole for the federal money they received after the crisis.
Washington's about-face will come as little surprise to market participants who for years predicted that efforts to replace Fannie and Freddie, which together back around half of all outstanding mortgages, would prove too difficult. But the shift nevertheless illustrates one way in which ideologues appear to have lost ground to market realities.
While Treasury's report envisions Congress passing legislation to refashion the nation's $10 trillion mortgage market, that is a heavy political lift as the 2020 campaigns get under way -- rarely a window for sweeping bipartisan change in Washington . Current and former administration officials concede Congress is unlikely to tackle the issue.