Mon, Sep. 19, 3:43 AM
- Global bond issuance is running at its fastest pace in nearly a decade as companies, countries and U.S. agencies such as Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) binge on debt in an era of historically low interest rates.
- According to Dealogic, a total of $4.88T of debt has been sold since the year began as issuers take advantage of rock-bottom borrowing costs.
- The figure is a hair below that of 2007, when $4.91T of bonds were issued during the same period.
Fri, Sep. 9, 3:57 PM
- A federal judge dismissed a case brought by an investor against the FHFA and Treasury over the 2012 change to the bailout agreement which resulted in the infamous profit sweep.
- The investor had argued her investments in Fannie Mae (OTCQB:FNMA -2.2%) and Freddie Mac (OTCQB:FMCC -1.2%) were damaged by the move. Similar lawsuits have been tossed by other federal courts, reports John Carney in the WSJ.
- In this case, the judge said the Housing and Economic Recovery Act (HERA) barred courts from interfering in the FHFA's authority as conservator of the GSEs.
- There remain, of course, a number of other suits brought by investors in Fannie Mae and Freddie Mac.
Tue, Aug. 2, 9:50 AM
- Actually, the taxpayers will receive $933M after the company earned $1B in Q2. Freddie Mac (OTCQB:FMCC) will now have paid $99.1B to Treasury vs. $72.3B in draws.
- While market-related items cut $1.4B from income in Q1, they sliced just $400M from it in Q2.
- Credit loss benefit of $775M in Q2 vs. $467M in Q1, as certain seriously delinquent single-family loans were reclassified from held-for-investment to held-for-sale.
- Previously: Freddie Mac reports Q2 results (Aug. 2)
- Full release
Tue, Aug. 2, 8:22 AM
Tue, Jun. 21, 4:09 PM
- The class action plaintiffs have been ordered to submit supplemental briefs over a number of questions about the role of sovereign immunity, writes John Carney.
- While the questions don't necessarily mean the court is leaning towards the government in its verdict, he says, there are hints. Most notably, the requests were directed at the class action plaintiffs, not the individual ones. This could mean the court is not inclined to accept demands for injunctive relief over the 20112 change to the bailout terms for OTCQB:FNMA and OTCQB:FMCC.
- The questions may also suggest the court hasn't found any claims for jurisdiction persuasive (agreeing with the 2008 trial court).
- New briefs are due on July 1, and the government has until the 8th to respond.
Fri, May 20, 10:36 AM
- The unsealing of documents as part of the lawsuit filed by private investors against the government shows the decision about the 2012 profit sweep was not necessarily out of concern with protecting taxpayers from future losses.
- The change, according to an email from Jim Parrott, then a top White House official on housing finance, was structured to ensure Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) couldn't "repay their debt and escape as it were."
- Documents show the government moving quickly to put the sweep in place after the FHFA learned the GSEs were about to enter "the golden years" of profitability.
- The sweep, said Parrott, eliminated "the possibility that they ever go (pretend) private again."
- The significance of the documents, writes Gretchen Morgenson, goes well beyond the future of housing finance. "They demonstrate the perils of allowing the government to act in secrecy."
Tue, May 3, 8:29 AM
- The company had a net loss of $354M in Q1, and a comprehensive loss of $200M.
- At work were derivative/hedge-related losses of $3.4B vs. just $152M in Q4. Net interest income of $3.4B compared to $3.6B a quarter ago.
- Net worth of $1B means no Treasury draw is necessary, and the company has $140.5B in available funding under the purchase agreement.
- Full report
- Previously: Freddie Mac EPS of -$0.11 (May 3)
- OTCQB:FMCC flat premarket
Tue, May 3, 8:17 AM
Fri, Apr. 15, 2:25 PM
- Investors today are presenting arguments to a federal appeals panel that the August 2012 net worth sweeps of Fannie Mae (OTCQB:FNMA -12%) and Freddie Mac (OTCQB:FMCC -13.8%) were illegal. There's no word publicly yet on how things went down, but the direction of the stocks may give a clue.
- Now read: Fannie Mae And Freddie Mac: A Generational Investment Opportunty (April 14)
Tue, Apr. 12, 1:21 PM
- In a deposition taken last summer, former Fannie Mae (OTCQB:FNMA +11.5%) CFO Susan McFarland recounts telling high-level Treasury officials on August 9, 2012 that the company was "now in a sustainable profitability," and a presentation now unveiled shows 10 years of internal projections indicating no need for further government assistance.
- Just over a week after that meeting, Treasury announced the profit sweep for Fannie and Freddie (OTCQB:FMCC +8.6%).
- McFarland, in last summer's deposition, says she believes that August 2012 meeting propelled the government to quickly change the terms of Fannie's and Freddie's bailouts to put in place the seizing of any profits.
- McFarland: "It was probably a desire not to allow capital to build up within the enterprises and not to allow the enterprises to recapitalize themselves.”
- Source: NYT
- Now read: Double Bind FHFA Legal Arguments Undermining Ownership Rights Set To Collapse (April 11)
Wed, Mar. 23, 4:01 PM
- Instead of winding down Fannie Mae (OTCQB:FNMA -1.3%) and Freddie Mac (OTCQB:FMCC -2%), the GSEs would be merged into a government-owned corporation with the responsibility of buying mortgages, creating MBS, and guaranteeing against default, writes Joe Light in the WSJ.
- It's a significant shift for some of the paper's five authors, which include key players in shaping the Obama administration's housing policy (and at least one economic advisor to Hilary Clinton).
- The new entity would be called the National Mortgage Reinsurance Corporation, and while investors would bear most of the risk of mortgage defaults, the government would guarantee the bonds got paid on time. The authors say the fees charged would be lower than the current system at times when investors wish to take on more risk, and higher when investors are more risk-averse.
- While the plan as written has little chance of gaining traction in this election year, it does set parameters for the debate going forward.
Tue, Mar. 15, 1:14 PM
- In what would its first such deal since the financial crisis, JPMorgan (NYSE:JPM) is looking to sell $1.9B in MBS, with most of the credit risk passed on to the buyers, as the bank would keep the safest tranches for itself and sell the riskier parts to investors searching for yield.
- Financial institutions issued $61.6B of private mortgage bonds last year vs. $1.19T issued at the peak of the bubble in 2005.
- This particular deal is a "house transaction" in which the MBS are entirely backed by mortgages (6K-plus) owned by the bank. While JPMorgan could have unloaded the paper to the GSEs (OTCQB:FNMA, OTCQB:FMCC), it clearly thinks it can do better by selling to private investors and/or holding on to some of it.
- Source: WSJ
Thu, Mar. 3, 4:22 PM
- In upholding a district court ruling that the GSEs are private companies, the 9th Circuit Court of Appeals may have just handed the Delaware GSE cases to the plaintiffs, writes Todd Sullivan.
- The defendants (the government) had argued that Fannie Mae (OTCQB:FNMA +6.8%) and Freddie Mac (OTCQB:FMCC +6.5%) are "federal instrumentalities," and thus federal law, not state law governs the conservator's power. Plaintiffs, on the other hand, argued the two are Delaware companies ruled by Delaware law, where the net worth sweep is illegal.
- "The government here," says Sullivan, "is between a rock and a hard place."
Thu, Feb. 18, 8:29 AM
- Q4 comprehensive income of $1.641B vs. a loss of $501M in Q3. Full-year comprehensive income of $5.799B vs. $9.426B in 2014.
- The dividend obligation to Treasury this quarter will be $1.7B. Including that amount, Freddie Mac (OTCQB:FMCC) will have paid $98.2B vs. cash draws of $71.3B.
- Full report
- Previously: Freddie Mac reports Q4 results (Feb. 18)
- Conference call is underway.
Thu, Feb. 18, 7:17 AM
- Freddie Mac (OTCQB:FMCC): Q4 EPS of $0.13
- Revenue of $3.59B (flat Y/Y) beats by $140M.
Dec. 29, 2015, 6:32 AM
- The federal government is trying to get taxpayers off the hook for billions of dollars of potential losses if another mortgage crisis arrives - and in the process, it's quietly giving birth to a new asset class.
- Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) next year plan to ramp up sales of new types of securities (called Connecticut Avenue Securities and Structured Agency Credit Risk) that in effect transfer potential losses in a housing downturn to private investors.
- The sales are especially notable because issuances of private-label MBSs, which also give private investors mortgage exposure, are still moribund.