Friday, February 20, 2015

The GSE Fannie Mae Freddie Mac lie, as told by FHFA and Treasury!

As you can see in 2008, fannie and freddie started losing money.
But they really did not!
From 2008 to 2009 they wrote off assets as a loss, but before the ACTUAL LOSS occured.
This was instructed by the FHFA who took over the GSE's in 2008.
This amount was $130 billion in write downs! This gave the treasury and FHFA the needed reason for
why fannie mae and freddie mac were bad! Remember no actual loss took place! Only an accounting
write down! Later in mid 2011 you can see Fannie and freddie started to break even and profit, It was then
that the Sweep or Expropriation of the GSE's came to mind!
Reverse the write downs that never needed to be taken in 2008 and feed over $230 billion to the Treasury!
Now if the $130 billion in 2008 was never needed to be written down, how would this graph look?
The losses would have been around $50 billion for the two! The real problem with that is these two had over $70 billion in capital and would have never needed $1 single dollar from the treasury!
So why the takeover? The GSE's bailed out wall street! FHFA used Fannie mae and Freddie mac to
buy up all the crap loans and refinance them with HARP and HAMP federal programs.
What did they refinance them into? 30 year mortgages!!

Thursday, February 19, 2015

Freddie Mac suffers $3.4 bln in derivative losses in Q4

Freddie Mac suffers $3.4 bln in derivative losses in Q4

Is this bad? It does not look like it is!

WASHINGTON, Feb 19 (Reuters) - Freddie Mac saw $3.4 billion in quarterly derivative losses due to declining interest rates, the government-controlled mortgage finance company said on Thursday.
The losses caused a $1.9 billion drop in fourth-quarter earnings to $227 million, the company said, its lowest profit in that quarter since 2001.
Freddie Mac also said it will pay $851 million to the U.S. Treasury in March, its smallest dividend payment since the first quarter of 2009.
Freddie Mac Chief Executive Officer Donald Layton said a hefty derivative loss could require the company to draw money from the Treasury. But the chances of this occurring were "highly, highly" remote, he said in a telephone interview.
The CEO said that for such a thing to happen this year, the market would have to factor in very extreme interest rate moves. He added that as Freddie's reserve cushion declines, its usage of derivatives to hedge against interest rate risk also falls.
HEDGING RISK
Layton said the company needs to hedge its interest rate risk with derivatives. When interest rates fall, as long-term rates did this year, Freddie will suffer losses on its derivatives, he said. The opposite will occur if rates move higher, as they have at the start of this year, he said.
Over the long term, Layton said, the difference in derivative gains and losses is small.
"We believe it's smart for us and the U.S. taxpayer to not be overly concerned with quarter-to-quarter ... earnings volatility," he told reporters on a conference call.
So this 3.4 billion allows freddie to keep money it would otherwise send to treasury!!
And if interest rates go up, freddie will gain on its derivatives. So are interest rates going up or down in 2015? Up is the answer and freddie will make money on this bet and keep that money, instead of sending it to Treasury!!


Wednesday, February 18, 2015

Take your neighbors house, force a loan on him, and TAKE his paycheck forever= US Treasury to Fannie Mae and Freddie Mac

Whats the biggest bailout in US history mean to the US taxpayer?
A return on investment of $36 Billion dollars after all paid back, and counting.
$112 for every man, woman, and child in the USA!
Did you get your check yet? Treasury has it, if you ask them I am sure they will send your family of 5 $560 check! And every quarter that goes by you will get another $21 dollars for each person alive in america today! I bet you would like some of that taxpayer money they used to FORCE a loan on Fannie and Freddie? It is a sham the US government acts like you and me, the taxpayer, are getting something from the treasury taking of ALL the profits of private companies. This is the same as if your employer started making more money by stealing money from your friend and did it for your benefit, but did not do it for you at all. They did it for themselves and tell everyone they steal for your benefit!! Its still TAKING what is not theirs and it is not for you! How the lie continues in a free press society is beyond me other than the Press is on the Take of big government and those that would lie to you and me, the taxpayer!

Imagine a world where fannie didnt keep housing afloat!

That world would look like this:

http://finance.yahoo.com/news/mortgage-apps-plunge-rates-hit-120003404.html

Mortgage interest rates rose to their highest level since the beginning of this year, and mortgage volume reacted in the opposite direction. Loan applications fell 13.2 percent for the week ending February 13, according to the Mortgage Bankers Association.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.93 percent from 3.84 percent, with points increasing to 0.35 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA. That increase had the biggest effect on refinance applications, which fell 16 percent week-to-week on a seasonally adjusted basis.
"Refinance volume fell particularly for larger loans, as evidenced by the decline of almost $25,000 in the average loan size for a refinance loan," said Mike Fratantoni, MBA's Chief Economist.
Mortgage applications to purchase a home also reacted negatively, falling 7 percent for the week, although they are just barely higher than a year ago. This, even after the FHA, the government mortgage insurer, lowered premiums on low down payment loans dramatically just three weeks ago. That made loans considerably cheaper for cash-strapped buyers.
It just shows how sensitive today's buyers are to the slightest moves in rates. The 30-year fixed is still below 4 percent, historically very low, but home prices are still rising. Prices are not being driven as much by demand as they are by incredibly tight inventory.
Demand is unlikely to improve this week, not for refinances nor for purchases. Interest rates jumped again Tuesday, reacting quickly to a sell-off in the bond market. Mortgage rates loosely follow the yield on the 10-year Treasury, which moved markedly higher
"In terms of bad months following good months, February is the worst bounce since January 2009," said Matthew Graham of Mortgage News Daily. "What had been 3.625 percent two weeks ago is now 3.875 percent."
The nation's home builders and Realtors had been hoping for a bounce over the President's Day holiday weekend, the unofficial start of the spring housing season, but buyer traffic was weak. Builders blamed frigid temperatures and seemingly endless snowfall across much of the nation, but others pointed to simple fundamentals.
"It's the price point, not the temperature, that is chilling builders," said Nela Richardson, chief economist for Redfin.
Home builders are still focusing on higher-end homes, which will become more vulnerable as rates rise. They are also still building at below-average levels. January housing starts are set to be released by the U.S. Commerce Department at 8:30 am Eastern Time Wednesday.

Fannie Mae: Perspectives on HERA Shareholders Can Take to the Bank – Or at Least Should

Fannie Mae: Perspectives on HERA Shareholders Can Take to the Bank – Or at Least Should



Citing Sec. 4617(b)(2)(B) of the U.S. Code, he pressed whether that section of the law allows the government to take over the assets of mortgage market giants Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) / Federal Home Loan Mortgage Corp (OTCBB:FMCC) with all powers of the shareholders.  In other words, can’t the government do pretty much as it sees fit as the conservator of these government-sponsored enterprises (GSEs)? After all, aren’t the rights of the stockholders suspended during the conservatorship?
The only problem with this line of inquiry is that it misses other key components of the law as well as the intention of Congress – the letter and the spirit of the law. A complete reading of that section of the U.S. Code makes clear that it stipulates that the Federal Housing Finance Agency, which  HERA created and vested all power in as conservator, is to do whatever is needed to “conserve and preserve” the Fannie Mae and Freddie Mac’s assets. There’s also the explicit and separate direction to conservators to takes steps necessary to put the regulated entity in a “sound and solvent condition.” In other words, a conservatorship is meant to be a temporary arrangement that anticipates restoring the Fannie Mae and Freddie Mac and stockholders continue to retain all rights in the stock’s financial worth, which, by the way, is determined by the market, not the government.

U.S. identifying people to target for role in mortgage crisis

U.S. identifying people to target for role in mortgage crisis


The Justice Department, in conjunction with other authorities, extracted record penalties from major banks in 2013 and 2014 for inappropriately marketing risky mortgage securities in the run-up to the financial crisis.
JPMorgan Chase & Co (JPM.N) agreed to a $13 billion deal in November 2013; Citigroup Inc (C.N) signed a $7 billion settlement in July 2014; and Bank of America Corp (BAC.N) reached a $16.65 billion agreement in August.
Still, the government has been criticized for not bringing cases against top executives for their roles in the misconduct.

Monday, February 16, 2015

After the Housing Crisis, a Cash Flood and Silence

After the Housing Crisis, a Cash Flood and Silence

NEW YORK TIMES 

Whatever the case, it is disturbing that the government goes to such lengths to shroud the details of the profit-sweep decision. It reminds me of a comment made by Ferdinand Pecora, the hard-driving prosecutor who investigated Wall Street’s role in the crash of 1929. In his memoir, “Wall Street Under Oath,” he wrote: “Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism.”