Seeking Alpha

Fannie Mae (FNMA)

  • Tue, Jun. 9, 7:54 AM
    • Taking a new line of attack, the government has asked a federal court to dismiss a lawsuit filed by Fairholme Funds over Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC).
    • According to the government plea, Fairholme purchased its shares in the GSEs after implementation of Treasury's 2012 arrangement to sweep all the GSE profits. The government points out a federal court ruled a developer couldn't sue over an environmental regulation because it purchased the land in question after an EPA decision ended any chance of development.
    • Source: WSJ
    | Tue, Jun. 9, 7:54 AM | 37 Comments
  • Thu, May 21, 1:02 PM
    • Fannie Mae (OTCQB:FNMA) chief economist Doug Duncan sees 2015 single-family mortgage originations of $759B, up 8% from his forecast at the start of the year. Were originations to hit that level, they would be up 12% from 2014.
    • "Purchase mortgage applications have moved up consistently for a couple of months,” says Duncan.
    • Previously: Housing starts jump in April (May 19)
    | Thu, May 21, 1:02 PM | 3 Comments
  • Mon, May 18, 3:21 PM
    • A privatized Fannie Mae (OTCQB:FNMA +0.8%) and Freddie Mac (OTCQB:FMCC +1.2%) would likely have to boost their capital, meaning higher fees and costs being passed along to borrowers, say the Urban Institute's Jim Parrott and Moody's Mark Zandi in a report titled, "Privatizing Fannie and Freddie: Be Careful what you ask for."
    • They see mortgage rates rising by as much as 97 basis points in the wake of privatization, or higher rates and a combination of less lending. Either way, the impact on home-ownership would be a negative one.
    | Mon, May 18, 3:21 PM | 20 Comments
  • Tue, May 12, 2:45 AM
    • "The magnitude of enormous," declared U.S. Judge Denise Cote, ruling that Nomura (NYSE:NMR) and RBS made false statements in selling MBSs to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) before the financial crisis.
    • The two banks have been the only ones out of 18 financial firms that took their case to trial, arguing that it was the housing crash, and not deceptive loan documents, that caused the bonds to collapse.
    • The other firms — including Goldman Sachs and Bank of America — settled, together paying nearly $18B in penalties.
    • Previously: Nomura wants day in court over mortgages (Mar. 16 2015)
    | Tue, May 12, 2:45 AM | 9 Comments
  • Thu, May 7, 9:46 AM
    • Q1 net income of $1.9B vs. $5.3B a year ago. Comprehensive income of $1.8B will be forwarded to the U.S. Treasury, bringing the total paid to $138.2B vs. draws of $116.1B.
    • Single-family serious delinquency rate of 1.78% down 14 basis points from Q4.
    • Quarterly report
    • OTCQB:FNMA -1.4%
    | Thu, May 7, 9:46 AM | 16 Comments
  • Thu, May 7, 8:26 AM
    | Thu, May 7, 8:26 AM | 10 Comments
  • Wed, May 6, 1:11 PM
    • The FHFA in January set a $30M annual cap on the amount of apartment mortgages Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC +0.4%) could back, but - with that limit set to be hit in Q3 - the agency is set to loosen that restriction, according to Bloomberg.
    • Without such a move, the two would have to begin cutting back on business - raising costs and limiting access for borrowers. Already, the two have been raising interest rates to try and slow the pace of activity.
    • Among the options for the FHFA would be simply raising the caps (sounds too simple). Also being considered would be broadening certain criteria to make more mortgages exempt from the limit.
    • Walker & Dunlop (WD +18.4%) is sharply higher on the session after reporting a big Q1, but surely won't mind hearing this news. Other commercial loan originators like HFF (NYSE:HF), iStar Financial (NYSE:STAR), and Ladder Capital (NYSE:LADR) may have interest as well.
    • Previously: Walker & Dunlop +7.2%: "The wave has hit" (May 6)
    | Wed, May 6, 1:11 PM | 1 Comment
  • Thu, Apr. 30, 12:52 PM
    • Under the FHFA's severely adverse scenario - unemployment spiking to 10% in a year alongside a plunge in economic growth - Fannie Mae (OTCQB:FNMA +1.9%) and Freddie Mac (OTCQB:FMCC +2.3%) could need to draw as much as $160B from Treasury to stay afloat. Last year's stress test capped the max draw at $180B.
    • Thanks to prior deals with Treasury, the two mortgage giants have funds available to them that are larger than the projected losses.
    | Thu, Apr. 30, 12:52 PM | 13 Comments
  • Thu, Apr. 23, 9:25 AM
    | Thu, Apr. 23, 9:25 AM | 42 Comments
  • Wed, Apr. 15, 4:40 PM
    • Low-income housing advocates are sure to be disappointed by what's expected to be a very modest cut in fees from Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). Riskier borrowers could see savings amounting to just hundredths of a percentage point on a mortgage rate.
    • It could be worse. Prior to Mel Watt taking over at the FHFA, his predecessor Ed DeMarco was planning on hiking fees - a move Watt promptly halted, leading some to believe a significant move in the other direction was coming.
    • Source: WSJ
    | Wed, Apr. 15, 4:40 PM | Comment!
  • Fri, Apr. 10, 12:26 PM
    • The WSJ's John Carney has repeatedly ignored securities owned by Treasury in his calculations of the government's return on investment in Fannie Mae (OTCQB:FNMA +2.7%) and Freddie Mac (OTCQB:FMCC +2.8%), writes Dick Bove.
    • The senior preferred securities held by the U.S. have 10% coupons, says Bove, making them worth far more than their combined $189B in face value. If allowed to trade on the open market, they could go for a 75% premium, putting their value at $331B.
    • Then there's the warrants - the Treasury owns 7.2M of them (Fannie and Freddie combined). Carney values them based on the current market prices of the GSEs, but they would be worth tens of billions more under fairly conservative assumptions were Fannie and Freddie released from their conservatorship.
    • Adding it all up, Bove finds the government with a profit of $416B on its $189B investment, and he believes the Grassley inquiry is aimed at getting past a lot of the hyperbole and finding out the facts.
    • Previously: Carney: Grassley letter not indication of support for GSE lawsuits (April 9)
    • Previously: FRBNY: Fannie and Freddie have not yet repaid bailout (March 25)
    | Fri, Apr. 10, 12:26 PM | 22 Comments
  • Thu, Apr. 9, 9:37 AM
    • “Senator Grassley isn’t taking a position on who’s entitled to what shares or appropriate levels of return," says his spokeswoman Jill Gerber.
    • Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) had big sessions yesterday after Senator Grassley - chairman of the Judiciary Committee - sent letters to the DOJ and Treasury seeking details about the government's stonewalling over the release of documents pertaining to the decision to change the terms of the GSEs' bailout.
    • Dick Bove called the letter "gargantuan news."
    • More from Gerber: "He’s simply asking why the Administration reportedly is citing executive privilege to withhold documents on major government decisions."
    • Source: WSJ
    | Thu, Apr. 9, 9:37 AM | 24 Comments
  • Wed, Mar. 25, 3:58 PM
    • Treasury's investment in the mortgage giants is entitled to a "substantial risk premium," argues a new paper from the New York Fed, thus justifying payments well in excess of the nominal bailout amount.
    • Fannie Mae received $116.1B and has repaid $134.5B; Freddie received $71.3B and has repaid $91B, reports John Carney.
    • What's more, the government backstop has lowered funding costs for Fannie (OTCQB:FNMA -1.6%) and Freddie (OTCQB:FMCC -1%), thus boosting profits for the two. The government has also never forced payment of the commitment fee the GSEs promised to pay in exchange for Treasury's commitment to continue providing emergency funding.
    • Instead of being returned to control of shareholders, the two should be wound down, concludes the paper, which calls the failure to do so a "colossal missed opportunity to put U.S. residential mortgage finance on a more stable long-term footing."
    | Wed, Mar. 25, 3:58 PM | 80 Comments
  • Wed, Mar. 18, 2:14 AM
    • Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) could require more bailouts from U.S. taxpayers due to rising risks from shrinking reserves, said the FHFA's Inspector General in a report today.
    • The firms could chalk up losses on their derivatives portfolios again, similar to those they reported in the fourth quarter, increasing "the likelihood of additional Treasury investment," the report continued.
    • The possibility of another taxpayer draw raises pressure on Congress to overhaul housing finance laws, although new legislation is not expected anytime soon.
    | Wed, Mar. 18, 2:14 AM | 44 Comments
  • Thu, Mar. 5, 2:29 PM
    • "Let me remind you, both recapitalization of (OTCQB:FNMA and OTCQB:FMCC) and draws against the existing Treasury backstop due to potential future losses would come at taxpayers’ expense,” says Michael Stegman, Treasurys counselor to the secretary for housing finance policy, speaking at a Goldman Sachs housing-finance conference.
    • He notes both have significant remaining credit to draw on should capital run low.
    • In the absence of any housing finance reform from Congress, Stegman suggests he would like to see the two GSE wind down their mortgage portfolios at a faster pace than is currently happening. He also likes recent efforts to offload some of their credit risk to the private sector, and would like to see more of such deals.
    | Thu, Mar. 5, 2:29 PM | 37 Comments
  • Fri, Feb. 20, 8:16 AM
    • Q4 net income of $1.3B vs. $3.9B in Q3. Full-year net income of $14.2B vs. $84B in 2013. Last year's income included a $45.4B tax benefit.
    • Fannie (OTCQB:FNMA) expects to pay Treasury $1.9B in dividends this quarter, bringing the total paid to $136.4B vs. draws of $116.1B.
    • "Fannie Mae expects to remain profitable on an annual basis for the foreseeable future; however, the company expects its earnings in future years will be substantially lower than its earnings for 2014, due primarily to the company’s expectation of substantially lower income from resolution agreements, continued declines in net interest income from its retained mortgage portfolio assets, and lower credit related income."
    • Previously: Fannie Mae reports Q4 results (Feb. 20)
    • Full report
    | Fri, Feb. 20, 8:16 AM | 14 Comments
Company Description
Fannie Mae is a government-sponsored enterprise that was chartered by Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold.
Sector: Financial
Industry: Savings & Loans
Country: United States