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Inside The GSEs

September 3, 2008

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Why Don’t GSEs Sell Off Portfolio Portions?

With capital levels at Fannie Mae and Freddie Mac continuing to be a concern among GSE investors, analysts, regulators and observers, one question that has emerged is: why don’t Fannie and Freddie shrink their retained portfolios in order to preserve capital? The thinking is, the GSEs don’t have many cards to play if they want to improve their capital levels. Issuing new stock isn’t feasible... Read More

FHLB Fannie, Freddie MBS up 21 Percent

The 12 Federal Home Loan Banks collectively used their new-found authority to boost their holdings of Fannie Mae and Freddie Mac mortgage-backed securities by 21.1 percent during the second quarter, according to an analysis by Inside The GSEs of data provided by the Federal Housing Finance Board and the new Federal Housing Finance Agency. Fannie and Freddie... [Includes one chart] Read More

Fannie, Freddie Business Volumes Drop in July

Fannie Mae and Freddie Mac posted significant declines in new business, either because of tighter underwriting criteria or fewer attractive buying opportunities. Perhaps it’s a little bit of both.Despite industry hopes that Fannie and Freddie would be able to ride to the struggling market’s rescue, the two GSEs dramatically reduced their new business volume activity in July. According to... Read More

FHLBs Join Fannie, Freddie in Paying Higher Spreads

In a sign that investors are demanding – and getting – more of a premium for some of the most conservative investments on the market, the Federal Home Loan Banks, as a cooperative, found themselves having to hang a bigger worm on their global bond hook in order to get enough fish to bite. Last week, the FHLBanks priced a $3 billion three-year global bond with a 3.683... Read More

Rebound Does Little to Recoup $100 B in Market Cap

Over the last 10 days, the prices of Fannie Mae and Freddie Mac common stock staged a bit of a rebound off recent lows and then ceded some of the newly captured territory. But that’s done precious little to recoup the $107.78 billion the two GSEs have lost in combined market capitalization since their respective 52-week trading highs in August of 2007. Fannie’s market capitalization as... Read More

Policymakers Ponder Options in Responding to GSEs

The recent uptick in Fannie Mae and Freddie Mac stock prices over the last 10 days or so has given Treasury Secretary Henry Paulson a bit of a reprieve regarding the necessity of utilizing that federal backstop authority for the GSEs he successfully lobbied for during the run-up to the enactment of the Housing and Economic Recovery Act. That in turn has given federal regulators... Read More

Fannie’s Board Doesn’t Play the Mudd Card, Yet

The continual pounding Fannie Mae has suffered to its bottom line has caused some heads to roll in the executive suite, with the board of directors siding with President and CEO Dan Mudd for the time being. Last week, Fannie announced it was moving out three top executives and replacing them with three professionals from within the organization, effectively immediately. Ousted was... Read More

GSEs to Stop Buying NY Subprime Loans

A tough assignee liability provision in New York state’s new subprime lending reform law has prompted Fannie Mae and Freddie Mac to declare “subprime home loans” originated in the state on or after Sept. 1 as unfit for purchase. The legal provision states that a borrower in default for more than 60 days or in foreclosure may use a violation of any of the prohibited... Read More

FHLB San Fran Anti-Foreclosure Program Begins

The Federal Home Loan Bank of San Francisco is poised to begin its pilot program to provide matching grants to member institutions to restructure or refinance mortgages for low- and moderate-income homeowners facing foreclosure. The Bank will accept applications from Sept. 2 through Nov. 3, and awards are expected to be announced by Dec. 1. “The Homeownership... Read More

News In Brief

Obama, Business Economists Say Fannie, Freddie Too Big to Fail: Democratic presidential nominee Sen. Barack Obama said recently that... Fannie’s PAC Pulls Away From Freddie’s Through June 30: Fannie Mae’s political action committee has again taken off and left the PAC of... Read More

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