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Volume 2014 - Number 11

March 20, 2014

Fannie and Freddie Could Be Worth $170 Billion in Fire Sale, But Private Investors May See Little or None of It

If Fannie Mae and Freddie Mac are eventually liquidated, the federal government could reap between $170 billion and $234 billion in net proceeds, according to a new audit of the firms, but that doesnít mean the junior preferred stockholders in the two will see a dime of that money. The newly released Johnson-Crapo mortgage finance reform bill provides no relief to investors in the junior preferred or owners of common stock in the two government-sponsored enterprises, leaving all liquidation proceeds to the U.S. Treasury, which owns the senior preferred shares. Over the past 18 months, several high-profile private-equity firms Ė Fairholme Capital, Pershing Square and Perry Capital, to name a few Ė have invested...

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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.


No. It’s still difficult compliance/regulatory-wise.


Maybe. It’s under consideration.


Not now. But things could change as 2018 progresses.