Fannie Mae posts
Posted Jun 22nd 2009 10:40AM by Elizabeth Harrow
Filed under: Federal Natl Mtge (FNM), Politics, Housing
Outspoken congressman Barney Frank has no shortage of critics, and they're sure to be out in force today. This morning, The Wall Street Journal reported that the chairman of the House Financial Services Committee, along with his colleague Anthony Weiner, is actually recommending that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) relax their lending standards on condominiums.
The controversial request follows a decision by both Fannie and Freddie to tighten mortgage-lending standards for condos. In March, Fannie said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of units have been rented, up from its previous benchmark of 51%. Freddie is due to implement similar measures in July. In a letter to the CEOs of both mortgage lenders, Reps. Frank and Weiner expressed their concerns that the higher standard "may be too onerous," and asked the lenders to "make appropriate adjustments" to their approach.
Continue reading Barney Frank encourages Fannie, Freddie to relax lending standards
Posted Jun 8th 2009 2:00PM by Daleela Farina
Filed under: Forecasts, Conventions and conferences, Federal Natl Mtge (FNM), Housing, Recession, Financial Crisis
In celebration of Barry Ritholtz's critically-acclaimed new book Bailout Nation, he held The Big Picture Conference, which I was fortunate to attend.
Here are the main points from the most reputable speakers, Congressman Alan Grayson, Nassim Taleb, Doug Kass, and Josh Rosner.
Florida Congressman Alan Grayson discussed how systemic risk is an excuse for socialism and that interconnectedness is the main reason that these institutions are "too big to fail." In fact, these institutions no longer hold social or economic purpose, they are simply too big to exist.
Continue reading The 'big picture' of our economy
Posted Apr 15th 2009 11:00AM by Connie Madon
Filed under: Politics, Financial Crisis
Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have similar purposes but different structures. Fannie Mae was founded in 1938 during the Great Depression for the purpose of purchasing and securitizing mortgages to keep funds flowing to institutions that lend money to home buyers. In 1968, the government converted Fannie into a private shareholder-owned corporation. Freddie Mac, on the other hand, was created in 1970 as a government-sponsored enterprise to expand the market for secondary mortgages in the US.
In September 2008, the Federal Housing Finance Agency (FHFA) director James B Lockhart announced that Fannie and Freddie would be placed under the conservatorship of FHFA.
Continue reading Should we say goodbye to Fannie and Freddie?
Posted Apr 14th 2009 4:00PM by Jon Ogg
Filed under: Johnson and Johnson (JNJ), Chevron Corp (CVX), Federal Natl Mtge (FNM), Goldman Sachs Group (GS)

Today was just a day of selling the news. We had weak retail sales and we had lower than expected PPI data
showing no inflation. But after a 5-week straight rally, investors were selling into earnings despite many estimates looking excessively
easy to hit.
Here are today's unofficial closing bell levels:
Dow 7,918.11 -139.70 (-1.73%)
S&P 500 841.87 -16.86 (-1.96%)
Nasdaq 1,626.40 -26.91 (-1.63%)
Top Analyst UpgradesTop Analyst DowngradesContinue reading Closing Bell: Set up profit taking on news (CVX, DNDN, FNM, GS, JNJ)
Posted Apr 3rd 2009 12:30PM by Elizabeth Harrow
Filed under: Scandals, Federal Natl Mtge (FNM), Politics, Housing, Financial Crisis
According to a report today in The Wall Street Journal [subscription required], Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- those twin titans of mortgage mayhem -- are planning to dish out $210 million worth of retention bonuses over the next 18 months. James Lockhart, director of the Federal Housing Finance Agency, explained that $51 million in payouts were distributed in late 2008, with the rest of the bonuses to be disbursed through 2009 and into early 2010.
The news is already raising politicians' ire, since Fannie and Freddie are staying afloat only through the grace of government bailouts. The two lenders reported combined losses of roughly $108 billion in 2008, says the Journal, yet 80% of Freddie's employees and 61% of Fannie's payroll will score retention bonuses based on this bleak operating performance.
Continue reading Fannie Mae, Freddie Mac planning massive retention bonuses
Posted Feb 19th 2009 2:51PM by Todd Harrison
Filed under: Citigroup Inc. (C), Federal Natl Mtge (FNM), Amer Intl Group (AIG), Economic data, Lloyds TSB Group plc ADS (LYG), Federal Reserve, Financial Crisis
This port was written by Minyanville contributor Minyan Peter.
I think the Government will try at all costs to create the impression that only a limited number of banks are going to be nationalized. To achieve this, Secretary Geithner has requested that the top 15-20 banks in the country undergo a stress test, where regulators will review banks' capital positions under a variety of economic scenarios. And, based on these reviews, those banks that fail will be given convertible preferred stock to boost their capital levels to some yet to be determined level.
Continue reading What will nationalization mean?
Posted Jan 30th 2009 6:45PM by Peter Cohan
Filed under: Federal Natl Mtge (FNM)
In 2008, the average stock on the S&P 500 lost 38.5%. John Paulson, no relation to the former Treasury Secretary who is famous for making billions shorting sub prime mortgages in 2007, made almost exactly the same percentage increase as the S&P 500 lost. So in some sense, if you're wondering what happened to your money, ask John. He's got it.
Exactly how well did Paulson do and how did he do it? Paulson Advantage Plus, his largest fund with $7 billion in assets, returned 37.6% net of fees for 2008 -- this means that his pre-fee returns probably topped 40%. Paulson again bet right about the collapse of financial institutions. In early 2008, Paulson shorted Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- betting that they'd become insolvent or need to raise additional capital that would dilute shareholders.
Continue reading Wonder where your money went last year? John Paulson took it
Posted Jan 17th 2009 2:40PM by Tom Taulli
Filed under: Housing, Recession
Over the past few years, the mortgage business has been virtually dead -- that is, until recently.
Why? The key driver, of course, is the plunge in interest rates (keep in mind that the Federal Reserve plans to buy up $500 billion in mortgages). In fact, you can get a fixed-rate mortgage loan for less than 5%. You'd have to go back to the 1950s to see those levels.
But there's a caveat: the mortgage growth is not for purchasing houses; instead, we are seeing a surge of refinancing activities. But, hey, this is a start, right?
In the first week of 2009, we saw the biggest jump in mortgage applications since 2003 (this is according to a report from the Mortgage Bankers Association). There was a 15.8% jump in the index.
Interestingly enough, it's still fairly difficult to secure a mortgage, especially as underwriting standards have increased. Basically, a large number of consumers have minimal levels of home equity as well as damaged credit.
Now, Fannie Mae is in the process of implementing new programs for troubled borrowers, which should help. What's more, Congress may introduce some new programs.
However, it is critical that housing prices increase again, which means the U.S. economy will need to once again get back on track.
Tom Taulli is the author of various books, including The Complete M&A Handbook
and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market
. He is also the founder of BizEquity, a valuation website.
Posted Jan 15th 2009 5:15PM by Todd Harrison
Filed under: Deals, Federal Natl Mtge (FNM), Federal Reserve, Recession, Financial Crisis
The dismantling of the financial stocks is mind-boggling but not entirely unexpected. Last year, we discussed the need for culpability to extend throughout the societal spectrum, from borrowers who over-extended on their credit to the institutions that financially engineered risk to policy makers who were compliant by acceptance.
The fact that many of these names are going to Fannie Mae (NYSE: FNM) is perhaps the healthiest possible scenario through the lens of "taking medicine as a function of time and price." It is, however, massively unfortunate for the employees who simply followed marching orders.
We're talking livelihoods lost here. Life savings evaporated. Careers ruined.
Therein lies the "other side" of the aforementioned "healthy" scenario: societal and structural implications. We've talked about the former ad naseum so I don't think we need to beat that horse. On the structural side -- and something to keep in mind for those calling for the heads of financial professionals -- is the fact that if there isn't incentive for people to fix the system, it simply won't get fixed.
Incentive on Wall Street equals money. The industry will be austere and ripe with humility, mind you, but we must find our way to a healthy supply-demand and a balanced give-and-take. For if we don't crack the code in short order, we risk that our capital market structure will cease to exist altogether.
Posted Jan 12th 2009 2:15PM by Connie Madon
Filed under: Deals, Bank of America (BAC), , Personal finance, Housing, Recession, Financial Crisis

Not to worry, your mortgage is $200,000 and your house is worth only $150,000. Fannie Mae to the rescue. Fannie Mae will let you sell your home at $150,000 and Fannie Mae will take the loss. You don't even need a buyer for your home!
This situation is called being "upside down," which means that you owe more than the house is worth. Selling your home when you are "upside down" is called a "short sale."
This is not a new practice. It has been used before but never without a buyer. Most deals fell through because the paper work took too long or because lenders, servicing firms and mortgage guarantors rejected the sales price. For these reasons, "short sales" have a bad reputation among real estate agents.
Continue reading Fannie Mae's new program. Is this a winner or what?
Posted Jan 12th 2009 1:01PM by Marjorie Backman
Filed under: Mutual funds, Federal Natl Mtge (FNM), Personal finance, Federal Reserve

In these times of economic uncertainty many investors are taking a closer look at bonds and bond funds. But if individual investors are looking for a safe place to grow their savings, they should select funds carefully.
As the
New York Times observed in a December 26 piece,
Older Investors Should Examine the Risks in Bonds, "Because conditions may worsen before they improve, older investors should check that their bond investments are indeed what they thought they were--and that they fit their tolerance for risk." The article quoted Financial Counselors bond manager Gary Cloud: "We are in a 2 to 3 percent world, and if they want to earn more than that they need to proceed cautiously."
A
WSJ January 4 piece
In Search of Wall Street Bargains, carried Morningstar analyst Lawrence Jones' assessment of 2008 as an "absolutely brutal year" for most bond investors and observed: "Bond prices tumbled as investors anxious about the economic slowdown dumped corporate bonds and other obligations that carry the risk of default." Meanwhile, Treasury securities and the funds composed of them "delivered strong returns as investors bid up the prices of these safe havens."
Also on January 4, a
Chicago Tribune piece,
Bonds may be a shield, but they're still risky, echoed this theme. Noting that Steve Savage, editor of No-Load Fund Analyst, has advised individual investors to consider corporate bond funds and even high-yield bond funds, the
Tribune warned, "Whenever yields are high, there is a good chance that financially stressed companies won't be able to repay their debts. In other words, bonds would default and investors would lose money."
Continue reading Picking the right bond fund to stash your cache and grow it safely
Posted Jan 6th 2009 5:00PM by Connie Madon
Filed under: Market matters, Money and Finance Today, Federal Natl Mtge (FNM), Goldman Sachs Group (GS), Federal Reserve, Financial Crisis
Last Friday the Fed announced a $200 billion dollar program for buying toxic assets from banks to help them stay afloat. Yesterday the New York Federal Reserve Bank started a new $500 billion dollar program for buying toxic securities from Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM)
Since Friday the yield on 30 year agency mortgage securities dropped from 208 basis points over Treasuries down to 190 basis points. This has had the effect of lowering mortgage rates. The rate on a 30 year fixed mortgage has dropped to 5.3% from 6% last November.
The Fed is using four firms to conduct these transactions. They are: BlackRock (NYSE: BLK), Goldman Sachs (NYSE: GS), Pimco and Wellington Management.
As was stated previously, the Fed has not disclosed the details of any of these repurchase programs. They are saying that they will be doing this "as the need arises."
A dramatic effect of this new Fed action is the sharp drop in US Treasuries, which today are down another 217 basis points on the 30 year March futures contract. Since last Wednesday the March 30 year bond futures contract has dropped from 141 down to 133 for a drop of about 800 basis points or $8,000.
I guess we can assume from all of this that Freddie Mac, Fannie Mae and the banks are in much deeper trouble than the Fed led us to believe last November. The Fed is not calling these bailouts any longer. They are just going ahead with these massive programs, programs that, by and large, investors and the public are not aware of.
What are your thoughts on these programs?
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