Replies to post #440414 on Fannie Mae-No Politics (FNMA)

[navycmdr]

What We’re Hearing: President Trump: Wells Fargo Will be Fined President Trump ?
Time to Exempt Fannie and Freddie from the GOP Tax Overhaul ?
Who Lost the GSEs ?
Hensarling’s Change of Heart, Why ?
CMLA Names Former Freddie Official Acting Director

December 8, 2017 ... By Paul Muolo ... [e-mail]



Wells Fargo, the nation’s largest home lender and servicer, will not escape the wrath of the Consumer Financial Protection Bureau for (allegedly) over charging consumers for rate-lock extensions. Who says so? President Trump, that’s who. In a tweet that came mid-morning Friday, Trump tweeted out: “Fines and penalties against Wells Fargo Bank for their bad acts against customers will not be dropped…”

Trump’s declaration was in reaction to a Reuters’ story that said the CFPB might go easy on Wells. (The news organization quoted anonymous sources.) The megabank had come to terms with the agency prior to the recent departure of Director Richard Cordray…

Now comes the big question: Why is the president of the United States weighing in on a bank regulatory issue? Then again, it’s Donald Trump. Mortgage ramifications? Stay tuned…

If the GOP tax overhaul plan becomes law with a 20 percent corporate tax rate, Fannie Mae and Freddie Mac will need to fork over to Treasury an estimated $13 billion to $19 billion (depending on the new tax rate) to cover deferred tax assets currently on their balance sheets. The estimate, which comes from Keefe, Bruyette & Woods, has been out there for months. But now it’s a little scarier for the simple reason that in 23 days, Fannie and Freddie will see their capital buffer fall to zero from $600 million currently…

Of course, tax writers working on the final details of the overhaul could create a legislative “carve out,” exempting Fannie and Freddie specifically from the DTA hit. But as one lobbyist told us, that’s highly unlikely at this point…

If you’re keeping score, the GOP is writing a tax bill – without Democratic input – that will result in the GSEs taking another draw from Treasury next year. The only way for Fannie and Freddie to avoid this is if they can earn that much in the fourth quarter. At this point, that’s almost impossible, though the two did – combined – earn $7.7 billion in the third quarter. However, a nice chunk of that represents a $5.5 billion subprime-related settlement that Royal Bank of Scotland paid to the GSEs this summer…

It’s quite possible that Democrats will blame the GOP for this looming GSE bailout. But will the voters? First, you’ll have to explain to them what a deferred tax asset is…

House Financial Services Committee Chairman Rep. Jeb Hensarling, R-TX, wants housing-finance reform as part of his legacy when he retires from Congress next year, so much so that he finally caved (this week) on the concept of maintaining a federal guarantee on certain parts of the conventional market. At least that’s how his change in attitude was explained to IMFnews…

Someone else who would like to see GSE/housing finance become a reality before he retires (late next year) is David Stevens, president and CEO of the Mortgage Bankers Association…

[jcromeenes]

Seemingly all this news looks great for us. On the other hand, the share price keeps taking hit after hit after hit. So hard to stay positive but I've been here nearly 5 years so I can stick it out longer. Just growing SO ANXIOUS.