Freddie (FRE) & Fannie (FNM) 01 (May 08 - Feb 12)

[winston]

In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.

That was the somber assessment delivered Thursday by the federal agency charged with overseeing the government-controlled Fannie and Freddie, which have lost a combined $165 billion since July 2007 as their bets on the housing market went bad.

Right now, 3.1 percent of Freddie Mac loans are seriously delinquent, and Fannie's seriously delinquent rates is an even higher 4.2 percent, Mr. DeMarco testified. And as unemployment nears 10 percent and homeowners struggle to persuade lenders to refinance their mortgages, delinquency rates are rising.

Fannie and Freddie now manage a stable of nearly 100,000 foreclosed properties, whose numbers are almost certain to grow.


Source: New York Times

[helios]

Fannie Mae Reviewing Treasury Decision on Sale of Tax Credits, By Dawn Kopecki

Nov. 9 (Bloomberg) -- Fannie Mae is evaluating whether it will have to write down the value of its low-income housing tax credits after the U.S. Treasury Department rejected a plan to do so, the mortgage-finance company said today.

A proposal by Fannie Mae to sell $2.6 billion of the credits would cost taxpayers more than the company would gain from the sale, according to a letter Treasury sent to the Washington-based company on Nov. 6. Treasury was weighing whether to let Goldman Sachs Group Inc. buy credits, which could be used to lower the firm’s tax bill.

Source: Bloomberg.com

[helios]

Why are FRE & FNM moving up on high volumes?

[helios]

RE: FNM,

1. it appears to have a trading band at 1.5 - 1.68+
2. pyscho level is marked at 2.0 (based on recent past events in August period)
3. Possibly, cut loss at 1.25
4. bullish hoshi at 1.26 (tonight could be a confirmation, depending on the trading volume)

TOL: Why are FNM & FRE moving up on high volumes and prices? No news or whatsoever ... ... shall i take a small position?

[helios]

5. during the august breakout, FNM recorded over 0.2 Billion. Took 3 weeks to fizzle out ...
6. however, its volume was only 0.14 Billion last night ...

[helios]

last night, i bought some FNM for trading purposes (with the intention to exit by March) ...

Have to watch out for the Fed govt. programme which could be ending in Q1'2010 ...

Also, FNM has just instituted tougher underwriting guidelines that will prohibit buyers with a high amount of debt from getting a loan ...

[helios]

Jan. 27 (Bloomberg) -- The Federal Reserve may take a chance the housing market can stage a comeback without its support by announcing today it will stick to the plan to end a $1.25 trillion program of mortgage-debt purchases in March.

Source: Bloomberg.com

[millionairemind]

Feb 25, 2010
Freddie Mac loses $11b in Q4
WASHINGTON - FREDDIE Mac lost almost US$26 billion (S$36.6 billion) last year, ominous news for US taxpayers who are footing the bill to rescue the mortgage finance company and its sibling Fannie Mae.

Freddie Mac, which has lost a total of almost US$80 billion since the housing crisis started in 2007, is bracing for more pain. The McLean, Virginia-based company said a record 4 per cent of its borrowers are at least three months behind on their payments and facing foreclosure. Its chief executive, Charles Haldeman, warned on Wednesday of a 'potential large wave of foreclosures' still to come.

This is a major problem for the federal government, which seized control Freddie and Fannie in September 2008. The two companies have already siphoned us$111 billion from the government to stay afloat. That number is expected to hit US$188 billion by fall 2011. And while Freddie Mac didn't ask for any more bailout money last quarter, the company said it will likely need more financial aid and might never repay it.

'We now have unlimited taxpayer exposure to the bailout of Fannie and Freddie, a bailout nation where the big get bigger, the small get smaller and the taxpayer gets poorer,' Rep. Jeb Hensarling, R-Texas, said at a House hearing Wednesday.

Fannie and Freddie dominate the mortgage market, backing about 70 per cent of the loans made last year. Freddie Mac and Fannie Mae purchase mortgages from lenders and package them into a securities. Investors are willing to buy the securities because they are effectively guaranteed by US government. That puts American taxpayers at risk.

But the fragile housing sector is so dependent on the government that officials say they won't have a detailed exit strategy until next year. Underscoring the market's weakness, the Commerce Department said on Wednesday that sales of new homes unexpectedly plunged 11 per cent from December to January to the lowest level on record. -- AP

[kennynah]

Fnm n Fre will be around for sometime. Even if the gahmen wanted them shutdown, they will just rename them to Lucy n Macy. 70% mortgage loans are from these 2. How to close them down?

[helios]

Not vested now.