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Most recently, at least SM and MC see the benefits to the taxpayers of having Private Capital in a 1st Loss Position on $6.75T in MBS, is that really such a far fetched of an idea?
Okay then, how do see this Governmental Fiasco coming to an end?
• Fannie Mae's Guaranty Book of Business increased at a compound annualized rate of 6.0% in January.
• The Conventional Single-Family Serious Delinquency Rate decreased 7 basis points to 2.80% in January.
• The Multifamily Serious Delinquency Rate decreased 2 basis points to 0.96% in January.
• As of January 31, 2021, 3.2% and 2.9% of our Single-Family Conventional Book of Business based on unpaid
principal balance and loan count, respectively, was in active forbearance, the vast majority of which were
related to COVID-19; 11% of these loans in forbearance (based on loan count) were current.
• As of January 31, 2021, 0.4% of our Multifamily Guaranty Book of Business based on unpaid principal
balance was in an active forbearance, the vast majority of which were related to COVID-19.
• In January 2021, Fannie Mae issued resecuritizations that were backed by $11.9 billion in Freddie Mac
securities.
• As of January 31, 2021, Fannie Mae's maximum exposure to Freddie Mac collateral that was included in
outstanding Fannie Mae resecuritizations was $143.3 billion.
IMPORTANT NOTE:
Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency (FHFA) acting as
conservator, since September 6, 2008.
https://www.fanniemae.com/about-us/investor-relations/monthly-summary
Guess whose going to release at least 1 opinion next Thursday?
https://www.supremecourt.gov/
So how do you envision this saga eventually being resolved?
So, $37B in new business added in January 2021, at 42bps, brings in about $155.4M of new revenue per year, not to shabby....
? The total mortgage portfolio increased at an annualized rate of 16.1% in January. ? Single-family refinance-loan purchase and guarantee volume was $84.5 billion in January, representing 73% of
total single-family mortgage portfolio purchases and issuances. ? The aggregate unpaid principal balance (UPB) of our mortgage-related investments portfolio decreased by
approximately $9.8 billion in January. ? Freddie Mac mortgage-related securities and other mortgage-related guarantees increased at an annualized rate
of 17.8% in January. ? Our single-family delinquency rate decreased from 2.64% in December to 2.56% in January. Our multifamily
delinquency rate remained flat at 0.16% in January. ? The measure of our exposure to changes in portfolio value (PVS-L) averaged $17 million in January. Duration
gap averaged 0 months. ? Since September 2008, Freddie Mac has been operating in conservatorship, with the Federal Housing Finance
Agency (FHFA) acting as Conservator. ? As of January, our maximum exposure to Fannie Mae-issued collateral that was included in Freddie Mac-issued
resecuritizations was approximately $89.7 billion, and is not in Table 4.
I think MC will keep his head down and nose to the grindstone, as he doesn't want to piss off the new chief in town! Post Collins, I am pretty sure JB's team will have a replacement in mind...
Government overreach (e.g., the nws) happens and the Constitution is designed to prevent it!
Q: Why didn't the US Congress simply pickup the tab for all these defaulting renters through adequate appropriatons?
A: Because letting the landlords pickup the tab doesn't cost the UST a dime!
Sadly, that same thinking occurred with the mortgage forbearance program!
Why should the UST pay for these eviction moratoriums, forbearances, $15 minimum wages, et. al., when they can make landlords, banks, and businesses pay for them?
Government overreach (e.g., the nws) happens and the Constitution is designed to prevent it!
Q: Why didn't the US Congress simply pickup the tab for all these defaulting renters through adequate appropriatons?
A: Because letting the landlords pickup the tab doesn't cost the UST a dime!
Sadly, that same thinking occurred with the mortgage forbearance program!
Why should the UST pay for these eviction moratoriums, forbearances, $15 minimum wages, et. al., when they can make landlords, banks, and businesses pay for them?
https://amp.cnn.com/cnn/2021/02/25/politics/judge-evictions-moratorium-unconstitutional/index.html
"Although the Covid-19 pandemic persists, he said, "so does the Constitution.""
The retained earnings stay on the gses balance sheet, hence the increase in the Net Worth each quarter, the LP is an issue that may not be viable in the future as it can be modified or eliminated by the courts or a new letter agreement, right?
The federal agencies are sometimes referred to as the 4th Branch of government, because most have Legislative, Judicial, and Executive Powers!
The ACA case and Collins seem like big cases, likely to have one or more dissents. In Collins, I am pretty sure Justice Kagan will dissent, with perhaps Sotomayor joining, but who knows for sure! Justice Kagan, as I am sure you know, while at Harvard Law School as a professor wrote about and advocated for a stronger NOT weaker 4th branch of gubmint, and appears NOT to be a "yuge" fan of the Unitary Executive Principle!
So far, most of these opinions released in 2021, have had unanimous decisions and I would imagine since the Justices are in agreement they are the ripest for release.
Given the issues and impacts involved with the ACA and Collins on Housing and Health Care as well as a likely non unanimous decision, coupled with their current docket, we may not have a decision until June.
In the meantime the twins will accumulate approximately $1B/month in capital, we'll see what happens!
Not today, we have an R!
78 days since oral arguments in Collins v Mnuchin, is today the day? We will find out shortly, good luck to all!
Why don't you sell now, your "free shares/lottery tickets", since you are 99% sure SCOTUS is a nada? You can always get them back later but more, right! HeeeeHeeee!!!
Not sure, both if there is precedent! FHFA is the current undisputed CZAR over the gses, but its actions and rules influence directly those lenders using them, when a "CONSERVATOR" enters into a 3rd party Government Agency (here UST) contract that directly limits the lenders access to the regulated entities and interferes with the lenders ability to do business with the regulated entities, does the lender have standing to sue, for instance under the APA?
Well, they should decide our case before the end of the term which ends in June! In the meantime earnings will accrue at about $1B/month (as well as the Liquidation Preference!). Like the lady in the video said, no one knows for sure when they will release their opinion on their case! The ACA case is one of the biggest cases, but generally I think most Americans believe Fannie Mae is a candy company (giving away free mortgage forebearances?)
Anyone want to take a guess on what opinions we get next Thursday? The challenge to the Affordable Care Act and Fulton v. City of Philadelphia—the LGBT / religious rights foster care case—are both possibilities. pic.twitter.com/XezFKI8EwJ
— SCOTUSblog (@SCOTUSblog) February 19, 2021
Interesting legal question, Do lenders directly effected and injured by a federal agency have standing to sue the FHFA?
I know, think how many hard working Americans and retirees, pension funds, small community banks, and tons of other innocent people have seen their investments vaporized by the abusive and coercive acts of the government during the 12+ year "Conservatorship"! Not to mention, had the government simply followed HERA and intended a "bailout", to begin with, the twins would have been free by now to assist hard working Americans with their housing needs! The whole drama is unfortunate isn't it?
That's right! And a couple of the Justices on the USSCT were giving Hashim a few sharp questions about the governmental stanch that the shareholders can't sue! Government Bad! Shareholders Good! Still, I think it's hard for people to be sympathetic to the "Evil Hedge Fund Guys/Evil Banksters"! You're an Evil Bankster aren't you!
Procedurally, in the 5th Circuit, da gubmint, when this case was initially filed, submitted what is known as a Motion to Dismiss. Basically, Uncle Sug said, "Judge you need to dismiss this shareholder lawsuit because a conservator "may" take all of the profits under HERA, there was a "death spiral" and therefore under the business judgment rule, the conservator may have made a bad business judgment BUT HE CAN DO THAT!, and it's a renegotiation of a financial contract from a fixed 10% interest rate to a variable dividend, and even if the shareholders win, they can't obtain an injunction because of HERA's anti-injunction clause, and the shareholders don't have standing because ONLY the conservator can sue on behalf of the companies and since this is a derivative claim and not direct the shareholders are SOL, and also an unconstitutionally insulated director's proper remedy is PROSPECTIVE RELIEF, not RETROSPECTIVE RELIEF, therefore the shareholders are only entitled to have the unconstitutional removal clause modified, going forward!
So, the 5th Circuit, Enbanc majority of judges ruled that da gubmints Motion to Dismiss, is denied because the judges found: (1) that the conservator's act of implementing the NWS, WAS ULTRA VIRUS (meaning outside of his powers, as it is impossible to "preserve and conserve" by giving away ALL of your wards profits!) and (2-by the slimmest vote count) the shareholders are entitled a PROSPECTIVE REMEDY ONLY on the unconstitutionally insulated director BECAUSE that is what the Judges thought (pre Seila Law) that that is what the USSCT had ruled in the past!
I think, the Collins Plaintiffs filed this suit in the 5th Circuit, years ago, and it takes this long to eliminate these bogus government arguments! BUT DAVID THOMPSON did the right thing, he is taking off the plate a future appeal by da gubmint by asking the SCOTUS to rule on some of these big appealable issues BEFORE trial. Also, the SCOTUS seems to get what is going on here, that the government has unclean hands, and could deliver a significant ruling that would greatly benefit shareholders in the future! They could also rule the opposite way!
Isn't this fun?
Didn't the 5th Circuit Enbanc court in addition to the unconstitutionally insulated director issue, also rule on page 4 of their majority opinion: "The Shareholders plausibly allege
that the Third Amendment exceeded FHFA’s conservator powers by
transferring Fannie and Freddie’s future value to a single shareholder,
Treasury. In Parts I–VI of this opinion, a majority of the en banc court holds
that this claim survives dismissal under Federal Rule of Civil Procedure
12(b)(6)."
Not sure, Guido, I read Note 3 and it seems like that may be where some deferred amortization income is buried, but accounting in the trillions for MBS, involves a couple of accounting assumptions, I would assume, I bet TH could shed some light!
An unshackled, capitalized, free gse would have been able to assist Americans much better with their current housing needs, its a shame that the government decided to steal all their capital, instead of a temporary Conservatorship as HERA mandated!
What would a bulldozer ruling do to the "commitment fee"? Would UST finally do what should have been done in the 08, that is say here's a line of credit at UST?
But it's a win for the twins, as the loans backing $6.7T of MBS, just became safer from default as borrowers have a greater financial stake in one of the primary assets on their balance sheet, their home! Also it bodes well for future economic growth as it increases spending slightly due to the "wealth effect".
Berkshire Hathaway's better half?