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https://www.aba.com/Advocacy/Issues/Documents/MBA-Housing-Finance-System-101217.pdf#_ga=2.17543097.1663598140.1516280325-1700073943.1516280325
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=135011752
Look and analyze all the previous letters of Mel Watt and compare it to the recently claimed letter?
They're vastly different.
Another thing,
Is that really Mel Watts letter?
It seems different from his previous letters which he has written to senators.
Is it possible its a fake?
The Mortgage Bankers Association embraced the outline.
“MBA is grateful for the well-informed input provided by the Director and hope that it contributes to momentum for congressional action on reform," said MBA head lobbyist, Bill Kilmer.
How is this good for us the shareholders?
What if watt was suggesting that preserve the companies but reincoroporate as in eliminate the shareholders?
"when recapitalization is complete they would be released from conservatorship"
This is the main issue. Who would trust the government, using the above quote, given their own history?
Any evidence of this?
Glen,
I've read the Moelis plan over and over, but one thing that I can't understand is how a capital raise can be conducted when the entities are still in conservatorship and under FHFA?
Investors would want some control and guarantee not a simple promise?
These companies have been looted and their investors treated very unjustly when it concerns the NWS and having the profits seized, Its a legitimate question to ask, why would any investors put money into when the same people are in charge given the risk they would be robbed?
A few thoughts
1.) Why set a 3 Billion dollar capital buffer?
2.) The president signed the tax bill before 2018 which means that the GSEs
would have to take a draw by the end of this quarter in March. This contradicts
with Mnuchins statement that they don't want taxpayers at risk. A draw even
if one time would give huge propaganda boost to Media and Others who
oppose the tax bill. Ammunition to democrats also.
3.) Again, you can't have any equity raises or ipos for these companies
until after they're released from conservatorship. Few if any investors would
trust based on promises.
I thought Mnuchin said that they weren't going to wind down the GSEs when asked about it?
Is there any draft of this legislation I can find or read? Or is it all rumors and hearsay for now?
Have corker or warner confirmed anything themselves?
What are these sources saying Corker and Warner are working on a bill?
Besides Joe Light I haven't seen anything.
I'm talking about the DTA lol
Okay, well then they should be released from conservatorship and recapitalize themselves upon release.
Recapitalization cannot take place without release.
If you buy a 40,000 car and finance it for 48 or 60 months....but suddenly the dealer changes the terms of the contract unilaterally and takes all your income plus interest and then you're broke and have no money.....and the mortgager says but it was 40K plus 10 percent interest and you technically owed us?
See where I'm going with that. :)
The NWS was illegal and the money stolen should be returned. The original contract can start again after the money returned so that it can be properly paid off in the original manner agreed to.
I tried googling this corker warner bill to try and get some more info on the sources behind it but am having no luck besides Bloomberg. If you have any other links please do feel free to share. Thanks.
The issue is that the NWS was illegal to begin with. So everything taken via the NWS and all the previous sweeps, they should be returned to the companies as capital. They've paid like what 100 Billion over the original bailout amount? What were the terms for paying it back before the illegal NWS?
All of their retained earnings which were stolen via NWS should be returned to them.
Well then to me, from information I've read, there's no other option to recapitalize them except letting them retain their own earnings for many years until they have a reserve.
At minimum the NWS.
I agree there will be some resolution. I am betting that they will be Recapitalized and released. I don't disagree one bit on that. If they wanted to wind these companies down, they wouldn't have given them the 3 Billion dollar capital buffer.
What I disagree on is the method of Recapitalization lol.
I don't think there will be any capital raise because of the governments prior mistreatment of the shareholders both common and preferred. No one will put in the billions in the hopes that the government will release these two companies because most know how that turned out when they were taken into conservatorship in 2008.
I am betting on a settlement or that the government will recapitalize these companies by re compensation. Giving back what was stolen from them.
How is the risk reward excellen in this caset?
You're relying on a promise, to privatize and release from conservatorship eventually, by a government who has already screwed you over before and taken other investors money lol?
If they were out of conservatorship and did an ipo then I could understand but in this case you're giving a thief money in the hopes that they'll give you back what you want or in corkers case do business and make money alongside you? Lol.
The elephant in the room that nobody's mentioned.
Why would big money investors invest in two companies still in conservatorship and controlled by the government?
Why would they trust Corker and the Government based on a "Promise"?
What questions does the big money investor ask themselves before investing?
I want intelligent answers to these questions and not pathetic answers such as:
"Trump and Moelis and Paulsons are all friends"
"Dudeee anyone will rely on the promise of the government cause that's how it works"
Lol.
You think Mnuchin will allow a Treasury draw in March lol?
That wouldn't be so good politically and would give the dems ammunition.
I'm one of many investors who will pay billions of dollars to invest in these companies, as part of an equity raise, despite the fact that they are in conservatorship, because the government promised to release them in the future. I believe them even though they have lied in the past.
^How realistic is the above statement? Lol.
Not many people, if any, would likely participate in this equity raise if these companies are still in conservatorship. Why would they? Especially given all the probes and instability of this current Adminstration.
Nobody is going to invest billions in anything controlled by FHFA and government and based on promises.
Don't think he would risk a government shutdown over that. I do believe something will happen with the GSEs in January 2018.
Jumpstart over.
Administrative solution.
I continue to be of the opinion that there is no corker warner bill and that it's all a hoax.
January is the next deadline due to the Omnibus real spending bill.
Corker, Hensarling can stick the Jumpstart into that Bill.
If they manage to do that, The Adminstration would have no say in the matter and they'd force them to draw just to make the adminstration look bad.
1.) It will have been 9 years since congress had an opportunity for housing finance reform. 9 Years. They have done absolutely nothing other than hurt the GSEs with a Jumpstart.
2.) The GSEs only have 3 months before they have to draw from the treasury loc due to tax cut DTAs.
3.) The Jumpstart law expires on January 1st. After which Treasury has no restrictions regarding the Senior Prefered Stock.
4.) If Mnuchin does nothing about the GSEs, Congress could get the chance to pass another Jumpstart to prevent administrative action from the treasury and or president.
5.) In Passing another Jumpstart if given the chance, Corker, Warner, and Hensarling could gain leverage in undermining trump and the Adminstration.
6.) Corker, Warner, and Hensarling can stall on housing reform and come up with some creative way to force the GSEs to draw from Treasury. Then they would indirectly make Trump Adminstration less popular.
Basically Mnuchin and Trump allowing a draw on their watch is political suicide and would easily be used against them by their critics. Don't see any reason why they would allow that. Forgetting whatever their stance is regarding the GSEs, it would be politically hurting and something no politician would want to own.
1.) You can't get the GSEs out of conservatorship until they are recapitalized and meet the minimum requirements set for capital.
2.) You can't conduct equity raises or stock offerings to raise
the necessary capital, because no Investors will put billions into companies that are still in government control and conservatorship.
Why would they knowing that at anytime the congress could pass
legislation which screws them over? The rationality is insane lol.
So DTA takes affect immediately?
I get it but it just doesn't add up unless I'm missing something.
Excellent contacts between 4 individuals isn't going to get invesotrs to put up billions for a company in conservatorship?
Especially if there is even the slightest chance the NWS could be reinstated etc.
Moelis doesn't sound right.
How can they succesfully conduct common equity raises to build capital while the company is in conservatorship? Who would trust the government or congress? lol
Navy, I have to agree with that. I love the positive sentiment, but there's no senate bill regarding the GSEs. I don't believe that any bill is in the works either. Why would people such as Corker or Hensarling suddenly want to help the GSEs? They don't.
I believe that ultimately, if anything, this comes down to an Administrative solution sometime during the month of January before congress can quickly pass Jumpstart 2.0. The senators mentioned in the article have absolutely no obligation or reason to pass a pro GSE reform bill when their goal is to wind them down.
Expect an Adminstrative solution or Another jumpstart. :)
So lets assume hypothetically that January 1st passes and the GSE jumpstart expires, lets also assume there is no Jumpstart 2.0, should we expect Watt or the Treasury to act as soon as possible on the matter before congress comes back in session? Or do they hold off on doing anything and keep saying they want to work with congress?
Lets assume that congress goes to recess without Jumpstart 2.0
Dude what are you talking about lol?
how so?
Lol is congress in session on the weekends? If not, and if they don't vote on Hr 4560 tomorrow, wouldn't they only have a week? Plus the tax bill and spending bill hoopla is going to be next week so don't know if they would have enough time?
It hasn't even been voted on in the house(Not yet) lol?
Why haven't the treasury exercised warrants already? Can't they do so at anytime?
Don't think so. It hasn't been voted on in the house yet. There's less than 10 days to go. The latest on the spending bill in which this could likely be added as a rider in omnibus, is that they're going to move that forward to January, which means deadline for the current jumpstart would expire.
I think it's too late.
Was just about to post that. Then also around 2:38
It was lol. I just rewatched it.
I think it passed, was that the bill that was passed by a 33-27 margin? Maybe it was a different bill I was hearing about. The one before the last one?
It passed, the no I think was to an amendment.