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Volume 17 - Number 15

July 28, 2017

Fairholme Staying the Course on its Fannie, Freddie Investment

In a recent conference call, Fairholme Capital Management founder and Chief Investment Officer Bruce Berkowitz stood his ground regarding the firm’s investment in Fannie Mae and Freddie Mac junior preferred shares, believing that the bet will pay off in time. He made it clear that Fairholme, at this time, has no plans to sell its stake, which the firm has valued at roughly $115.7 million. But Berkowitz also made it clear he sees little chance of GSE reform passing any time soon, and he anticipates that Federal Housing Finance Agency Director Mel Watt will not permit the Fannie/Freddie capital position to fall to zero in early 2018.

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How many new retail loan officers (net) is your shop looking to hire in the first quarter of 2018?

1 to 10. We’re being careful.


11 to 30. We’re feeling slightly bullish.


31 or more. We’re in expansion mode.

None. We’re staying right where we are, for now.


We’re cutting back.