Back in early June, the share price of Fannie/Freddie common was rallying, reaching $3.16 (for the former) and $3.07 for the latter. If you had bought in at those prices, today you’d be looking at losses of 23.1% and 24.7%, respectively.
In a new opinion piece, former Freddie CEO Don Layton argues against having multiple MBS guarantors, a position he’s taken in the past. Layton, who now bides his time at the Harvard Joint Center for Housing Studies, argues the barriers to entering the secondary guarantee business are high, “possibly even insurmountable.”
Fannie and Freddie will report second quarter earnings later this month. It's a safe bet that lower rates will translate into some large hedging marks...
The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter...
The robust second quarter brought year-to-date agency MBS issuance to $562.02 billion, just 1.3% below the level reached in the first six months of last year.
As of January 2019, Fannie employed 7,400 people compared with 7,200 a year earlier, according to 10-K filings with the Securities and Exchange Commission. There was no mention of the word “buyout” or “buyouts” in the SEC filing.
We understand from informed sources that paying off Fannie/Freddie shareholders (the ones suing Uncle Sam) is calculation that certain federal officials have entertained.
FHFA Director Mark Calabria on Bob Ryan: “Bob’s advice and counsel during my transition have been invaluable. I greatly appreciate his service at FHFA during the past five years and his role in helping ensure liquidity and funding for the nation’s housing finance system...”
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