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But, Tim Howard NEVER would take an appointment to FHFA from the Orange Pied Piper, although Howard would be superb.
True that!
But, the last thing you want is Congress writing massive GSE legislation, even if the D's controlled both chambers and the WH.
Nope, keep it simple, regulatory action to reduce the Calabria capital regs, possibly allowing management(s) to offer some more reductions to the junk fee costs of mortgage financing.
Naturally, those garbage costs all are tied to revenue generated by real estate agents, lenders, house inspectors, insurance providers, and others in the mortgage finance chain.
That's where the institutional opposition comes from, in addition to those in Congress who protect the middle people in the transactions.
One simple answer is that the "federal charter" confirms a red-white-and blue relationship that, in turn, suggests, "If you are big and important enough, Uncle will come to your assistance."
In the competitive financial markets, constantly balancing risk/reward, that is a huge/monster benefit.
With my employment history, despite that I've been gone for over 20 years, I believe I understand how the GSE game is played. I never would engage in those stock hijinks and I resent the suggestion.
I stated my political opinion and I thought I made that clear. Whether you buy or sell, either company, that's your call not mine.
If you can find my previous IH posts, from past years, going back to when I published a blog (with similar thoughts there as well), you'll see similar statements.
Calabria, a victim of his non-housing background and conservative dogma; Thompson, empty-suit, who was put into a job over her business capacity head and made subject to Treasury protocol.
They wanted to control GSEs--claiming "inadequate capital"-- then allow them to operate too successfully, making major "insiders," in both political parties look bad.
Sixteen years, now more, of unprecedented "Conservartorhsip," based on a well-documented 2008 political ambush that made no financial sense with few courageous people--outside of the companies--able to appreciate the Treasury bias and errors.
Likely, just a gas issue!
One response, which involves everything about the GSEs, "The FHFA (including Calabria and Thompson) lies"
F&F Merging?
Humble opinion, "Not in God's lifetime."
Howard has a New Post Up Today in His Blog
Real or BS??
Any housing "news" Yellen announces today that doesn't involve Faanie and Freddie being able to do "more" than they have to date to lower the cost of financing and buying a home will be a wasted opportunity and bullshit.
There are any number of ways F&F can help the low-moderate-and middle-income families in their regulatory purview, most immediately by slashing the ridiculous, unnecessary Calabria era GOP excessive capital requirements for the two mortgage guarantors.......long (wrongly!) denied holding loans in their investment portfolios capital levels Ms. Thompson continually supports.
Trust Tim's instincts on this!
My comment today on a Yahho business story, "Fact or Fiction: Congress Stole From Social Security and Should Return the Money It's Taken, With Interest" was rejected when I drew an analogy to the GSEs.
My comment;
The same principle--in spades or major greenbacks--applies to the Government's treatment of Fannie Mae and Freddie Mac, which--unlike no other financial service companies operating in the 2007 housing finance crisis-- sixteen years ago were put into "conservatorship"--where they are still--and required to give well over $300 Billion in company/shareholder profits to various Treasury departments.
Even when the SCOTUS got involved, it rendered one of the more tortured judgments against the mortgage plaintiffs ensuring the bizarre arrangement would continue.
Yet, Fannie and Freddie still exist, locked into this federal hellhole with their shareholders, both still backstop the US mortgage market, and both are still forced to pay billions annually to the federal fund, in addition to their full federal taxes
Skeptic--True that!!
Sure, he could.....but not if the big banks, Wall Street, Senate R's, MBA, and the rest of the MAGAs oppose that. (See TikTok!)
Remember, F&F (not so much the latter), capably run and not FHFA-constrained, have a history of removing "junk fees and other costs" from the mortgage transaction, on which other industry players get fat.
Yes, but my predicate is desperate officeholders, occasionally, do desperate things to retain those jobs, calling it "good/needed public policy."
My horrible BAD re Bradford comment.
In my response to another poster commenting on Bradford," I dropped the word "not."
Referring to Mr. Bradford, I meant to say, "It would NOT be the first time he was wrong."
My opinion, only!
Trump's letter to Rand Paul means nothing. Another time, another era. If asked, I am sure Trump, today, would cavil and not suggest any true GSE policy.
Also, forget Ms. Thompson. Her GSE thoughts matter little since Treasury and the White House will justify any GSE action they take.
Respectfully, it would be the first time he was wrong.
Sorry for you, that really sucks. But it's happening all over.
IMO, despite their positive rhetoric about "helping low and moderate-income buyers get financing," they won't be effective with the GSEs hamstrung in Conservatorship.
I can tell you, with great confidence, that idea--along with the multiple reasons for it, both political and economic--was given to senior WH officials several months ago.
And they produced NADA, except to give us, Sandra Thompson, with a far better candidate waiting there expecting to be named
You understand the statement, "I don't buy green bananas, anymore!"
I appreciate your counseling but too many conflicting GSE agendas in this Admin, from people who have ignored the past few very positive years.
LB--Biden Admin doesn't support GSE exit from "Conservatorship," offering the thinnest of statements and rationales.
Wait, that's my affliction you can't have it, too,
Lael Brainard, Biden's Economic Policy advisor, announced at a speech today that the White House was not interested in supporting ending GSE Conservatorship and that it planned to concentrate on helping lower and middle-income American families.
That's great, Lael!
But, which families--by charter--do you think Fannie and Freddie GSEs support?
Blame S. Lael Brainard (and likely Yellin) for this cash slaughter.
It certainly wasn't anything about the business or operations.
I am sure she heard from some financial services interests too, both of them, worried that the GSEs were getting some wind in their financial sales.
Of course, she couldn't offer a justification for leaving them in Conservatorship for the past 15+ years.
Vike--You are correct, from a business success standpoint, the GSEs have been marveling at low-risk management/revenue.production, etc.
But, as I've droned on and on, the "GSE Shit Wall" has nothing to do with business. It's all GSE politics.
Just remember that commercial banks, mortgage banks, and other financial service giants (most in the DJT posse) don't want to see the GSEs out of Conservatorship.
Mnuchin backed off, after making positive early noises re F&F, but bagged it. And I don't see Trump doing anything.
Plus, the MAGAs in Congress would kill the GSEs if they had a chance.
As we used to say 70 years or more ago, "You betchum, Red Ryder." (Old cowboy character and his young Indian sidekick.)
Most appraisals are based on the potential lender, who has to underwrite the loan, and the appraiser, who often is--but not always--part of one of the two Realtor representatives involved.
Despite all of the rhetorical butt-covering, in the past, it was not uncommon for the appraiser to ask the lender what it was willing to lend on the property, and then--" "voila"--the appraiser's estimation would comport with it.
Easier when property values were more stable, but Iikely some variation still occurs today.
Which part? Do you mean all of the elements in the mortgage finance industry supporting over-priced services and junk fees??
And overpay for it, the old way.
Fannie's will come a lot cheaper, which is why the industry is so pissed.
Now go after the inflated cost of appraisals, Fannie!!!
See Andrew Ackerman in the WSJ.
Decent logic here from Joe.
Weird, we are talking GSE stocks, etc.. and Trump is in Mar-a-Lago meeting with another Putin-loving European thug.
Must be birds of a feather. What can Victor Orban offer the US, except to quick making trouble for Ukraine and butt out?
Guido, If I am wrong (since that happens to old men), I'll apologize, but--as part of HERA--I believe that the Treasury, at its option, has warrants to buy 79.9 % of both GSEs' stock.
If it happens, it might be as part of a larger end to "Conservatorship."
Depending on the F&F share prices should Treasury exercise those warrants, it would generate over $100 billion.
The higher the common price, the more Treasury would get.
Among other things, the common stock to jump (maybe double or triple).
Some more positive words from this WH, given the GSE fate, is all about politics.
Good for the GSEs, having nothing to do with Title Insurance.
Do you mean structural action or common stock price?
It or something else jumped the Fannie Ps today.
I will, once more details are in, but ironically, Biden's stemwinder and very successful and strident speech tonight may limit what happens to what they did today.
As with everything about the GSEs, it always been about politics, and I've been retired formally for almost 20 years.
I was surprised by today's action but when Fannie preferred jumped 83%, I assumed something might happen today/tonight.
It was a small administrative fix (as compared to legislative), since as we all have seen, the House and Senate--standing outside--would/couldn't agree if it was night or day.
If Biden continues to feel threatened by Trump. his Admin may do more to open up the GSEs, including something on ending Conservatorship.
The bizarre thin is ending the "C" would bring in $100 Billion or more TODAY when selling Treasury's 79% share of all GSE stock, If the price of common goes highter Treasury's return is even greater.
You could be right, but after 15 years, this is the happiest I've been.
Since it's the first White House in years to say anything positive about the GSEs.
See my post tonight.
EP--Don't miss the forest for the trees. This is good news, since it recognizes another value the GSEs can provide.
This is the first time that the Biden Admin has done anything positive for the GSEs (despite being approached to do so by several prominent elements) and the action, as noted, was taken despite FHFA's Thompson objectives.
Someone must have gotten tipped, since the Fannie Pref went up 80% today, along with a few pennies in the common.
Interesting to see how the Street handles it tomorrow.
Excellent News; FHFA told by WH to allow Fannie to offer title insurance--in lieu of industry-provided version--on some loans it guarantees, cutting home ownership costs.
Details soon to follow.
(Might explain why PFs were up today.)
News story in WSJ?