Private-equity firms such as Pershing Square Capital Management and Fairholme Funds are gobbling up the common and preferred shares of Fannie Mae and Freddie Mac, a trend that may continue as long as the two stay profitable and Congress dithers with how to end their conservatorships. “There’s some value there,” said Brian Harris, a senior analyst with Moody’s Investors Service. “The hedge funds believe the two will continue to earn money.” Industry observers who closely follow the government-sponsored enterprises predict...
Increasing Fannie Mae and Freddie Mac guaranty fees, as well as “incrementally” reducing the government-sponsored enterprises’ loan limits throughout the next decade, would save the government approximately $20 billion, according to the Congressional Budget Office. In a report published last week, the CBO projected the budgetary savings that would occur under two proposals. “By CBO’s projections under current law, the mortgage guaranties that the GSEs issue from 2015 through 2023 will cost the federal government $22 billion,” noted the report. “That estimate reflects the subsidies inherent in the guaranties at the time they are made.” Under one scenario, the average GSE guaranty fee would increase...
With refinance volume falling and minimum net-worth requirements heading north, advisors in the mergers-and-acquisitions market say undercapitalized firms should sell now, while they still can. Larry Charbonneau, a principal of Charbonneau & Associates of Texas, said he is currently working on four deals but noted that, “There a lot of shops out there with less than $5 million in capital that need to do something but haven’t realized it yet.” Although Fannie Mae and Freddie Mac have net-worth minimums in the $3 million range, there is...
Analysts commenting on the settlement note that while JPM did not admit any violations of law, it acknowledged in a “statement of facts” section that employees did not comply with company underwriting guidelines and representations.
The purchase mortgage share of originations is expected to increase significantly, from 30 percent in 2012 to 79 percent in 2015, according to Freddie Mac.
Freddie Mac projects that interest rates on 30-year fixed-rate mortgages will hit 5.00 percent by the end of 2014, with little impact on affordability.
Speaking at a housing finance forum sponsored by the Urban Institute and CoreLogic, Gene Sperling, a White House economic advisor, said the Obama Administration believes the “risks are simply too great and that this would recreate the problems of the past.”
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