Replies to post #43554 on Freddie Mac-No Politics (FMCC)

[FFFacts]

1.

I agree

Done.

2.

With #2 are you referring to MC's "extra capital requirement" when us housing prices increase above an historical benchmark? I heard MC left and there's a new sheriff in town who doesn't exactly see eye to eye with the former FHFA Director.

Yes, regardless the new FHFA mandated capital requirements are on the books right now until they are formally changed.

3.

Remember that California representative in the hfsc giving MC sh*t over the adverse market fee?

Yes, also other members of congress who didn't have a clue and kept on berating Calabria. His forbearance scheme saved the housing market from a crash.

4.

Refinance activity was up 7 percent overall, with gains in both conventional and government refinances. Additionally, the average loan balance for a refinance application was the highest in a month.

To my point. What happened in 2007-2008 with rising and unsustainable home prices? Look at HELOC lines and the inevitable rising interest rates.

4.

Reduced loan terms reduce the overall risk of the gses book of business because mortgagors build equity at a much higher rate thus reducing ltv even further.

Yes but it also reduces profitability for the gses in the long term. The gses are insurance companies what payoffs occur quicker than anticipated the longer term loans can't offset. So you will have a situation where the gses are turned into FHA loans which have much higher default rates.

The MCAI rose 0.1 percent to 125.7 last month. An increase in the MCAI indicates lending standards are loosening,

To my point.

6.

however a large cohort of millennials and baby boomers could simply put more money down from their inflated equity portfolios and/or other assets and salaries and wages could rise.

Money moved from inflated assets into hard assets like real estate will only worsen the rising real estate prices situation. When the stimulus money is works its way back to the govt via taxes the money supply decreases. When infrastructure projects start to wind down where will the new money come from? The macroeconomic situation will again be one of the typical boom and bust cycles.

7.

Zillows algorithm was mispricing housing assets. I've seen so much incorrect information on Zillow that I usually cut their estimates by 20% to 33%

Yes, I don't think they managed their buying process well at all but they also have internal forecasters that see some exogenous macroeconomic factors.

8.

yes

https://www.spglobal.com/spdji/en/index-family/indicators/sp-corelogic-case-shiller/sp-corelogic-case-shiller-composite/#overview

https://wolfstreet.com/2021/09/28/the-most-splendid-housing-bubbles-in-america-holy-cow-september-update/

https://www.ft.com/content/bc521dda-023e-48e0-8e63-5718ac77289c

https://www.nasdaq.com/articles/moodys-says-this-is-the-new-housing-bubble-2021-11-01

https://www.pods.com/blog/2021/10/housing-bubble/

http://housingbubble.blog/

https://www.cnbc.com/2021/04/16/billionaire-jeff-greene-says-this-housing-boom-is-in-a-bubble-too.html