Fannie, Freddie May Dodge Bailout
- By:
- Bill Rice | September 03, 2008
On the heels of a reasonably priced Freddie Mac auction of $1 billion in 5-year notes Fannie Mae and Freddie Mac's stock continues to climb out. This re-issuance priced at a spread of 95.6 basis points more than the 5-year US Treasury notes--signaling a reasonable risk premium and capability to continue issuing debt.
Alarms Sound, No Fire Yet
Despite alarm bells on the mid-August pull-back of foreign investors, Barron's infamous Bush administration insider discussing their inability to raise capital, and rating agencies downgrading their credit ratings to the lowest investment grade--Fannie and Freddie ride cautiously turning investor confidence.
Fannie, Freddie Shares Rally
The two government sponsored entities (GSEs) are riding a week long 30 percent rally in share value. Most of this confidence is coming from deeper consideration of eroding, but still significant capital reserves. Both GSEs were required to bolster capital reserves following accounting scandals that hit in the early 2000s, leaving each with in excess of 15 percent of minimum capital requirements. This places their combined reserves in excess of $80 million.
Housing Market Continues Uncertainty
Fears continue to swirl around an uncertain housing market that certainly has not hit bottom. Foreclosures and defaults continue to mount at an unprecedented and unpredictable rate. As a result, investors are betting on an overstated calamity--driving the stock to opportunistic discounts.
Paulson Holds "Bazooka" in Reserve
There continues to be discussion and even advocation of nationalizing and fracturing the GSEs into smaller, healther private entities, but for now it looks like investors are going to allow Treasury Secretary Paulson to keep his "bazooka" option holstered.
Hope Now Gaining in Foreclosure Prevention as Loan Modifications Increase
- By:
- Bill Rice - MortgageLoan.com | December 03, 2008
The Hope Now initiative, a private mortgage lender and servicer alliance, is increasing its effectiveness in preventing foreclosures. In October, Hope Now set a new record in foreclosure prevention modifying 225,000 mortgages. That total exceeds September's loan modifications by 13,000.
Law Firms and Banks Collaborating to Streamline Loan Modifications
- By:
- Bill Rice - MortgageLoan.com | December 02, 2008
Increasingly loan modifications are becoming the preferred mechanism to help defaulting homeowners and troubled bank mortgage asset portfolios. All of the major banks, Bank of America, JP Morgan Chase, and Citigroup have announced streamlined loan modification programs.
US Retailers Hope for a Big Cyber Monday
- By:
- Bill Rice - MortgageLoan.com | December 01, 2008
Retailers got a welcome Holiday gift on Black Friday, with retail sales actually rising 2 percent over last year. Despite the doom and gloom of economic prognosticators consumers lined the sidewalks in the wee-hours of the morning for "door-buster" deals.
Retailers Caught Flat-footed by Rapid Economic Slowdown
- By:
- Bill Rice - MortgageLoan.com | November 28, 2008
It's Black Friday, will they come? Black Friday a term linked to the fact that traditionally all retailers "make their year" by blasting into profitable territory for the entire year on the strength of holiday sales. This year may be a stark contrast.
President-elect Obama Subtlety Taking the Reigns of US Economic Policy
- By:
- Bill Rice - MortgageLoan.com | November 27, 2008
In his regular press conferences behind the very Presidential-looking "Office of the President-Elect" podium Obama quietly is absorbing the Presidency. Despite being 11 weeks away from inauguration and still two weeks away from officially being declared President-elect by the convening of the Electoral College, he is undeniably taking the reigns of US economic policy.
Federal Reserve Starts Printing Money to Jumpstart Lending
- By:
- Bill Rice - MortgageLoan.com | November 26, 2008
The Federal Reserve and US Treasury have announced another bailout, this one theoretically for consumers and small businesses. This plan involves another $800 billion.
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