Fannie Mae and Freddie Mac picked the low-hanging fruit first and sold large chunks of their most liquid “less-liquid” assets during the third quarter of 2013 as the government-sponsored enterprises continued to shift their business away from retained investments. The GSEs reduced their combined holdings of commercial MBS by 32.1 percent during the third quarter, according to a new Inside MBS & ABS analysis of their retained portfolios. The Federal Housing Finance Agency has directed the two companies to accelerate their portfolio trimming by focusing on “less-liquid” assets other than their own MBS. The commercial MBS market has been...[Includes one data chart]
The Center for American Progress called on FHFA to keep g-fees at current levels “until there is reliable evidence” to suggest that the government needs more revenue to cover the cost of the guaranty.
It was the now-senior Democrat senator from Massachusetts, Elizabeth Warren, who faulted the Fed for enabling the financial crisis that prompted such an unconventional accommodative response in the first place.
One last thought on Berkowitz and Fairholme: To get Congress to listen to your ideas you have to donate money. Berkowitz can check that box off his to-do list. He has been a generous donor to Republicans and Democrats alike over the past two election cycles.
The focus on purchase mortgages became urgent as interest rates started to increase in May, settling for the moment about 100 basis points higher than they were in April, reducing demand for refinances.
Fairholme owns $3.5 billion (face value) of GSE junior preferred stock. After company chief Bruce Berkowitz sent his tender offer to FHFA and then went on CNBC to discuss the plan, you can bet that the price of GSE preferred probably increased a bit.
The last time private MIs did more business than either the FHA or the VA was back in the first quarter of 2008. At that point, however, private MIs accounted for well over half of primary MI new business.
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