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’Buying out the mortgage market
Mortgage finance twinned with accounting rarely makes compelling reading, but bear with us.
Wednesday’s announcement that the two US Government Sponsored Enterprises (GSEs) will start buying out certain loans,
Filling the central bank void
Some thoughts to ponder before the Bank of England’s much-anticipated QE announcement later on Thursday.
FT Alphaville has worried before about what might happen once the Federal Reserve ends its $1.25 trillion buying-spree of mortgage-backed securities (MBS).
GSE losses could stand at $448bn, Amherst says
Here’s something that struck us in a bit of testimony submitted to the FCIC hearings on Wednesday.
In a document that’s well worth reading for some interesting banking statistics, J Kyle Bass, managing partner at hedge fund Hayman Advisors,
Fannie, Freddie and FAS 166/167
Who would have thought a new accounting standard might end up increasing prepayment speeds on US mortgages?
The two US GSEs will be, like other US financial companies, adopting FAS 166/167 from 2010.
Fannie to draw further $15bn
Fannie Mae said on Thursday it would draw another $15bn of funds from the US Treasury after reporting a ninth consecutive quarterly loss, of $19.8bn in the third quarter, driving its net worth below zero.
Fannie Mae loses $19bn in one quarter of one year
Nineteen BILLION dollars – that’s how much government sponsored entity Fannie Mae lost in the third quarter of 2009, according to the mortgage lender’s 10-Q filing with the SEC on Thursday.
That marks a ninth consecutive quarterly loss for the lender – which it accompanied with a request for a fresh $15bn bailout from the US Treasury.
Fed to cut GSE debt purchase
The Federal Open Market Committee on Wednesday decided to shave $25bn off the planned $200bn purchase of debt issued by state-owned mortgage giants Fannie Mae and Freddie Mac. The decision was justified on technical grounds reflecting “the limited availability of agency debt”.
Buffett seeks Fannie Mae tax credits
Warren Buffett’s Berkshire Hathaway has joined Goldman Sachs in the investment bank’s bid to buy $3bn in tax credits from government-owned mortgage giant Fannie Mae, reports the WSJ. The report comes amid news of Buffett’s $26.6bn purchase of US railroad operator BNSF. Buffett’s involvement adds a twist to an already politically sensitive deal,
The automated Hamp
Hello, welcome to Every Bank. This is an automated service.
Please tell me your name and account number.
John Doe. Account Number 12345678910.
You are applying for a Home Affordable Modification Plan.
Goldman eyes Fannie tax credits
Goldman Sachs is in talks to buy millions of dollars of tax credits from state-controlled mortgage giant Fannie Mae, but the potential deal is running into opposition from the US Treasury, which could block the deal,
Let them eat equity tranches – for real
Lo and behold — the draft Financial Stability Improvement Act worked out between the US Treasury and the House Financial Services Committee.
Of particular interest for structured finance watchers is this bit:
Hope for second-homeowners
Are you not eligible for the US government’s Home Affordable Modification Plan — the Hamp?
Are you a second homeowner, or investor in homes, underwater and struggling to pay your mortgage?
Then never fear,
Hamp-ered
Fannie Mae chief credit officer Edward Pinto has some strong words on the US government’s Home Affordable Modification Plan — Hamp.
From Clusterstock:
Based on comments being made by industry participants and program results to date,
Convexity crops up
Uh oh. There’s that word again — convexity.
Here it is in the Wall Street Journal:
[FTN Financial's Walt] Schmidt said mortgages are performing well, considering 10-year Treasury notes are yielding close to 3.2%.
Debt and the dollar’s demise, a compendium of concerns
Here’s a stark reminder of the ticking time bomb that is the US’s federal debt — now at an $11,900bn, or $38,000 per citizen.
Ratings agency Standard & Poor’s is now warning that the US will have to officially — and imminently — raise its federal debt limit:
Introducing NattyMac
You’ve probably heard of Fannie Mae and Freddie Mac, those saved-by-the-US-government entities and linchpins of the US housing market. You may also be familiar with IndyMac, the mortgage lender which failed spectacularly – though not without warning - in July 2008.
Wells Fargo urges US to boost mortgage market
The US government should help revive the moribund market for big mortgages by getting Fannie Mae and Freddie Mac to buy large home loans from banks, the chief executive of the lender Wells Fargo urged in an interview with the FT on Tuesday.
Recovery boosts Freddie, Fannie, AIG
Shares of Fannie Mae, Freddie Mac and AIG, the three financial groups taken over by the US government at the height of the financial crisis last year, have surged over the past three weeks, making them the most improved stocks on the New York Stock Exchange since early August.
Volume magnets
As the Wall Street Journal’s Heard on the Street column reported on Tuesday, there has been astounding trade – on a volume basis – in Uncle Sam’s ‘ward’ stocks for the past week or so:
How much is the stock market driven by Washington? Forget bailouts,
Freddie, Fannie doing just fine, thank you very much
Bronte Capital’s John Hempton has gone on a Freddie Mac, Fannie Mae modelling extravaganza. And his conclusions are somewhat refreshing. Namely, he’s certain Freddie and Fannie are not the endless black hole of losses their topline numbers suggest them to be — or in the case of Freddie,
Fannie Mae still bleeding money
With “results” like this, is it any wonder the future of the government sponsored entities is in doubt?
From the statement, released late on Thursday (emphasis FT Alphaville’s):
WASHINGTON, DC — Fannie Mae (FNM/NYSE) reported a loss of $14.8 billion,
Fannie and Freddie’s uncertain future
The future of those historic linchpins of the US housing market, Fannie Mae and Freddie Mac, is looking increasingly uncertain.
Consider these two separate – though perhaps not unrelated – pieces of news.
FHLBs, you shan’t go to the securitisation ball
That’s the Federal Home Loan Banks, the 12 regional US government-sponsored enterprises charged with providing loans to some 8,000 member banks.
The FHLBs have gained some prominence in the recent financial crisis,
Citi taps Fannie Mae for board
Citigroup is expected to name Diana Taylor, a former banking regulator who is a director of mortgage giant Fannie Mae and the companion of New York city’s mayor Michael Bloomberg, as a director in a revamp of its much-criticised board.
Prime-time problems for Fannie
News that Fannie Mae, the US government-controlled mortgage group, is still bleeding cash shouldn’t really come as a surprise. Nevertheless, the losses continue to astound us here at FT Alphaville.
On Friday the group reported its seventh consecutive quarterly loss in the order of $23bn.
FICO those CDOs
Rortybomb has some fascinating data points on FICO scores, RMBS, CDOs and subprime lending.
FICO scores, which range from 300 to 850 and are provided by Fair Isaac Corp, were a key feature in the boom of subprime lending.
Fannie Mae chief to head TARP
The Obama administration is expected to name Fannie Mae CEO Herb Allison to head the US government’s $700bn TARP financial rescue program, reports Reuters. The announcement is expected “in coming days,”
Fannie to draw further $15bn
Fannie Mae said on Thursday it would draw more than $15bn of assistance from the US Treasury after a sixth consecutive quarterly loss – $25.2bn in the fourth quarter – drove its net worth below zero.
The Tsy/Frannie connection
More grim dispatches from the US Treasury market. The WSJ runs today with a story on the popping of the Treasury bubble. Although the market is closed, there’s plenty of anticipation that with Obama signing another $800bn+ of taxpayers money away into the bailout ether,
Buried bail-outs
Yesterday was a pretty good day to bury news, amid the hoo-ha surrounding Treasury Secretary Tim Geithner’s much-anticipated ‘financial stability’ plan.
So it’s only now we’re coming to this little snippet (HT Deus ex Machiatto).