Tags: Fannie Mae, Freddie Mac, mortgages
Like many people, I like to believe that I prefer the government policies that I prefer because they’re a Good Thing for the world, not because they advance my self-interest. But as a relatively new homeowner, I break down a little on mortgages. Sure the mortgage interest deduction is a crazy and inefficient boondoggle, but it’s my crazy and inefficient boondoggle, and I don’t really want my apartment to lose (more) value if the deduction goes away.
Similarly, I’m pretty psyched about the plan that’s been kicking around, and that made it in vague form into the president’s jobs proposal, to allow people to refinance mortgages even if their houses are underwater or their income wouldn’t support the new payments. When I took out my mortgage I had a bit over one turn of leverage, as it were, which had my mortgage bankers congratulating me and asking if maybe I wanted to take a little more money just in case. Whereas now I make TXU look like a strong credit. Because um blogging pays less than banking you see. So I like the idea of being able to reduce my mortgage payment without actually having to try to convince a banker that it’s a good idea for me to keep this much debt. Even though I’m not entirely convinced that it’s good for the world.
Others are also skeptical. Read more »
Tags: All The Devils Are Here, Bethany McLean, Daniel Mudd, Fannie Mae, fingers, Joe Nocera, poking my eye out, those were the days, why do you have to say 'cutting off a finger' like it's a bad thing?
As Wall Street bonuses bulged and housing prices were peaking in 2005, Daniel Mudd found himself dreading his top job at Fannie Mae. Going to work felt like “a choice between poking my eye out and cutting off a finger,” Fannie’s former chief executive officer recalls in Bethany McLean and Joe Nocera’s new tome, “All the Devils Are Here.” [Bloomberg]
Tags: Fannie Mae, Freddie Mac, government bailouts, toxic mortgages
Fannie Mae is asking for another $8.4 billion from the government to cover losses on bad mortgages after reporting a dismal first-quarter loss of $13 billion.
If fulfilled, the new request will bring Fannie’s total bailout package to $83.6 billion, nearly double the size of what the Treasury injected into Citigroup and Bank of America from the TARP program in Sept. 2008. Read more »
Tags: Fannie Mae, GSE
Unsurprisingly the GSE is still a sink hole that cash is proving difficult to fill. Instead of growing out of the training wheels, the increased burden of debt has bent the brackets, cracked the frame and flattened both tires:
Fannie Mae’s first-quarter loss ballooned on surging credit losses as the company and the Treasury Department reached agreement on a deal that doubled the government’s support level to $200 billion.
The deal, which Fannie said in a filing with the Securities and Exchange Commission was reached Wednesday, has been keeping the company afloat while under conservatorship as credit losses exploded.
Fannie requested another $19 billion Wednesday, which if approved through a preferred-stock purchase would put the total given by the government at $35.2 billion. The stock pays a 10% yield.
This is amusing considering the GSEs are being used as a tool to spike lending and, one is expected to believe, reflate the economy. Expect another large and splashy collapse into a muddy puddle and more than skinned knees this time.
Fannie’s Loss Swells; Treasury to Bolster Support [The Wall Street Journal]
Tags: Fannie Mae, Freddie Mac, Putin On The Ritz, Russia
Well, someone over there is thinking. The motherland believes it has seen quite enough of agency shenanigans, thank you very much. There will be no more of that nonsense on Putin’s watch. Now let’s have no more of this so we can get back to imprisoning oligarchs and lacing reporters’ tea with lethal doses of radioactive material.
Russia banned investment of its $83.7 billion National Wealth Fund in bonds issued by foreign government agencies such as Fannie Mae (FNM.N) and Freddie Mac (FRE.N), the Finance Ministry said on Thursday.
The ministry said earlier on Thursday it had also banned investment of its $136.3 billion Reserve Fund in foreign government agencies’ bonds.
Russia bans Nat’l Wealth Fund investment in agencies [Reuters]
Tags: credit crunch, Fannie Mae, Stop Us If You've Heard This One
We had to check the date on this Bloomberg post very, very carefully to make sure it wasn’t off by a year. It is not:
Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.
Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees. (Emphasis ours).
The interesting thing about waking up every morning in a different Kafka piece is trying to guess which morning you are in Der Gruftwächter. This seals it. It is today.
Fannie Mae to Loosen Rules for Home-Loan Refinancing [Bloomberg]
Tags: credit crunch, Fannie Mae, Freddie Mac
At 2pm eastern, the Federal Housing Finance Agency is expected to announce a plethora of mortgage gifts to homeowners with Fannie Mae and Freddie Mac loans. This year, gifts will follow the increasingly popular “Reverse Santa” list (not to be confused with the “Double Lehman” formula) which provides relief in the form of federally mandated mortgage price fixing for those who have been caught on the Naughty Debtor list.
Don’t worry. Be happy.
Fannie, Freddie Work on Mass Loan Modification Plan [The Wall Street Journal]