AI
Friday, December 15, 2017 1:44:52 PM
What We’re Hearing: Bitcoin Comes to the Rescue of Homebuyers
Not There Yet
Would the White House Dare Fire Mel Watt ?
Probably Not ?
Shrinking the GSE Role
Judging the Profitability of MBS Guarantees
Friday Dec 15, 2017 By Paul Muolo ....pmuolo@imfpubs.com
You can’t (yet) buy a house using Bitcoin, but some consumers are cashing in their profits from the cryptocurrency, using the money for a downpayment. At least that’s the word from Redfin, the online real estate brokerage, which said Bitcoin “has created fast wealth for investors, and now some are cashing out and going house hunting.” So far, there’s been no instance of a seller accepting Bitcoins, at least not that we know of…
Redfin also pointed out: “[Real estate] Agents in Boston, Chicago, Houston, Philadelphia, Washington and several cities in California said they’ve had conversations with people about using cryptocurrency as part of their transaction. Currently, Redfin does not accept cryptocurrency as a form of payment.” Currently? Stay tuned…
At this point, it appears almost certain that Federal Housing Finance Agency Director Mel Watt will not alter the GSE dividend payment that Fannie Mae and Freddie Mac make each quarter to the U.S. Treasury. Some trade group officials are disappointed at Watt’s (predicted) inaction, while other stakeholders see it as a move at self-preservation. How’s that ?
If Watt had altered the payment schedule it would have allowed Fannie and Freddie to build retained capital. (On Jan. 1, the GSE capital buffer falls to zero from $600 million.) Such a change would have angered the Treasury Department – and could have resulted in the Trump administration firing Watt “for cause.” As Treasury Secretary Steve Mnuchin has said before: Uncle Sam wants his money…
Dave Stevens, president of the Mortgage Bankers Association, predicts that if Watt changes the dividend (the FHFA chief has until Dec. 31 to make up his mind), the response from the Trump administration would be “significant.” Stevens fears that the White House could fire Watt and install a successor who would shrink the GSE role in the mortgage market “significantly.” But ultimately, the MBA chief doesn’t see Watt altering the dividend so the whole firing scenario is a non-starter…
Rob Zimmer, who heads external affairs for the Community Mortgage Lenders of America, doesn’t believe the White House has legal standing to fire Watt if he monkeys with the dividend. “The FHFA director can only be removed ‘for cause’ in statute, and a cause is not that Watt follows the PSPAs [preferred stock purchase agreements], which state very clearly that government receives money when, as and if declared by the Board of Directors, in its sole discretion. Who are the boards in conservatorship? Watt.” Zimmer points out that the PSPAs were created by the Treasury Department…
Of course, the Trump administration has a history of shooting first and asking questions later…
And one last word on GSE reform: One legislative idea being bandied about entails the creation of multiple MBS guarantors to compete against Fannie/Freddie. Several stakeholders believe the profit margins on such a business (as designed by Congress) would be so meager that no one would jump into the game. True or not?…
Not There Yet
Would the White House Dare Fire Mel Watt ?
Probably Not ?
Shrinking the GSE Role
Judging the Profitability of MBS Guarantees
Friday Dec 15, 2017 By Paul Muolo ....pmuolo@imfpubs.com
You can’t (yet) buy a house using Bitcoin, but some consumers are cashing in their profits from the cryptocurrency, using the money for a downpayment. At least that’s the word from Redfin, the online real estate brokerage, which said Bitcoin “has created fast wealth for investors, and now some are cashing out and going house hunting.” So far, there’s been no instance of a seller accepting Bitcoins, at least not that we know of…
Redfin also pointed out: “[Real estate] Agents in Boston, Chicago, Houston, Philadelphia, Washington and several cities in California said they’ve had conversations with people about using cryptocurrency as part of their transaction. Currently, Redfin does not accept cryptocurrency as a form of payment.” Currently? Stay tuned…
At this point, it appears almost certain that Federal Housing Finance Agency Director Mel Watt will not alter the GSE dividend payment that Fannie Mae and Freddie Mac make each quarter to the U.S. Treasury. Some trade group officials are disappointed at Watt’s (predicted) inaction, while other stakeholders see it as a move at self-preservation. How’s that ?
If Watt had altered the payment schedule it would have allowed Fannie and Freddie to build retained capital. (On Jan. 1, the GSE capital buffer falls to zero from $600 million.) Such a change would have angered the Treasury Department – and could have resulted in the Trump administration firing Watt “for cause.” As Treasury Secretary Steve Mnuchin has said before: Uncle Sam wants his money…
Dave Stevens, president of the Mortgage Bankers Association, predicts that if Watt changes the dividend (the FHFA chief has until Dec. 31 to make up his mind), the response from the Trump administration would be “significant.” Stevens fears that the White House could fire Watt and install a successor who would shrink the GSE role in the mortgage market “significantly.” But ultimately, the MBA chief doesn’t see Watt altering the dividend so the whole firing scenario is a non-starter…
Rob Zimmer, who heads external affairs for the Community Mortgage Lenders of America, doesn’t believe the White House has legal standing to fire Watt if he monkeys with the dividend. “The FHFA director can only be removed ‘for cause’ in statute, and a cause is not that Watt follows the PSPAs [preferred stock purchase agreements], which state very clearly that government receives money when, as and if declared by the Board of Directors, in its sole discretion. Who are the boards in conservatorship? Watt.” Zimmer points out that the PSPAs were created by the Treasury Department…
Of course, the Trump administration has a history of shooting first and asking questions later…
And one last word on GSE reform: One legislative idea being bandied about entails the creation of multiple MBS guarantors to compete against Fannie/Freddie. Several stakeholders believe the profit margins on such a business (as designed by Congress) would be so meager that no one would jump into the game. True or not?…
