Fanny & Freddy

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Freddie to Tap $30.8 Billion in Aid as Losses Deepen
By Dawn Kopecki

March 11 (Bloomberg) -- Freddie Mac, the mortgage-finance company thrust into a leading role in President Barack Obama’s homeowner rescue plans, said it will tap $30.8 billion in federal aid as its loan holdings and other assets deteriorated.

The company, which owns or guarantees more than 20 percent of U.S. home loans, today posted a wider fourth-quarter net loss of $23.9 billion, or $7.37 a share. The results pushed the value of Freddie’s assets below its liabilities, the McLean, Virginia- based company said in a statement, and come as Chief Executive Officer David Moffett leaves after six months on the job.

“These numbers are so mind-boggling,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, who stopped giving estimates for Freddie after the company was seized by regulators on Sept. 6. “You can’t even begin to analyze it.”

Freddie’s ability to return to profitability depends on how long the government keeps using the company to push its housing agendas, Miller said. Freddie and larger competitor Fannie Mae have been pressured to carry out policy initiatives, including offering low-cost mortgage refinancings, since the government takeover. The often conflicting demands of appeasing regulators and pursuing profit may have led Moffett to resign, Miller said.

“They want these guys to refi mortgages without new appraisals and to keep mortgage rates very low; those are not sound business decisions,” Miller said. “They are being used as a public policy tool to save the housing market. That is just going to make it more difficult for them to be floated out as public companies down the road.”

Housing Slump

Freddie earlier today named non-executive Chairman John A. Koskinen, 69, as interim CEO, and said it would work with its conservator, the Federal Housing Finance Agency, to find a permanent replacement for Moffett.

The company said its net worth, or the difference between assets and liabilities, declined to negative $30.6 billion as of Dec. 31 from negative $13.7 billion on Sept. 30. Freddie took $13.8 billion in aid from the Treasury in November. The year-ago fourth-quarter loss was $2.4 billion, or $3.97 a share.

Washington-based Fannie said Feb. 26 it would draw $15.2 billion in Treasury capital and raised the possibility of asking for more after posting a $25.2 billion fourth-quarter net loss.

Freddie and Fannie, which own or guarantee $5.2 trillion of the $12 trillion U.S. residential mortgage market, are part of Obama’s plan to help 9 million Americans avoid foreclosure amid the worst housing slump since the Great Depression.

‘Deteriorating Effect’

The Obama administration on March 4 said a program using Fannie and Freddie to refinance as many as 5 million loans would have the companies buy mortgages on properties that have less than 20 percent equity without requiring new appraisals or additional mortgage insurance.

The plan also requires the government-sponsored enterprises, or GSEs, to pay mortgage servicers and borrowers fees to modify troubled loans. Fannie said in its earnings statement that the costs “ will be substantial, and these programs would therefore likely have a material adverse effect on our business, results of operations, financial condition and net worth.”

U.S. Representative Scott Garrett, a New Jersey Republican, said in a statement last week that the refinancing program violates the law and will “have a deteriorating effect on the GSEs, which will result in a higher risk to the taxpayer.”

Writedowns and Losses

Fannie and Freddie were chartered by the government -- and later sold to shareholders -- primarily to lower the cost of homeownership. The companies buy mortgages from lenders, freeing up cash at banks to make more loans. They profit on the difference between their cost of borrowing and the yield on the debt. They also guarantee and package loans as securities for a fee.

Their losses have surged as the U.S. recession cut property values, boosted foreclosures and slowed home sales. In the fourth quarter, Freddie took a $7.2 billion provision for credit losses and expenses, up from $6 billion in the third quarter, and had $13.3 billion in net mark-to-market writedowns mostly because the value of derivatives, mortgage assets and guarantees declined.

FHFA put the companies under its control and forced out management after examiners said the two may be at risk of failing. JPMorgan Chase & Co. CEO Jamie Dimon, speaking before the U.S. Chamber of Commerce in Washington today, called Fannie and Freddie’s growth and collapse “perhaps the largest regulatory failure of all time.”

Moffett Leaves

The Treasury in September pledged to buy $100 billion of each company’s preferred stock as needed when the value of their assets drops below the amount they owe on obligations. On Feb. 18, it doubled that funding commitment.

Moffett, 57, was tapped by regulators to be CEO. The former Carlyle Group executive who was once vice chairman of U.S. Bancorp, “indicated that he wants to return to a role in the financial-services sector,” Freddie said March 2.

Koskinen, a former deputy director of the White House budget office, was also brought in after the takeover to restructure the board and help with oversight of the company. He will return to his position as non-executive chairman once a permanent CEO is found. Director Robert Glauber is filling in as chairman.

Fannie and Freddie shares, which were above $30 in March 2008, have been trading at less than $1 since December. Freddie closed today at 42 cents in New York Stock Exchange composite trading. Fannie was at 39 cents.

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Foreign Demand for Long-Term U.S. Assets Weakens

Vincent Del Giudice

March 16 (Bloomberg) -- International demand for long-term U.S. financial assets fell in January, reflecting sales of corporate and government agency debt and China’s smallest net purchase since May.

Net sales of long-term equities, notes and bonds totaled $43 billion, compared with buying of $34.7 billion in December, the Treasury said today in Washington. Including short-term securities such as stock swaps, foreigners sold a net $148.9 billion, after net buying of $86.2 billion the prior month.

China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said last week. President Barack Obama is relying on China to sustain buying of Treasuries amid record amounts of debt sales to fund a $787 billion stimulus package.

“There was a stampede by foreign investors to exit their U.S. dollar investments,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Everyone wants to bring their money home. It’s not about return on capital. It’s whether you can get your capital back.”

Economists predicted international investors would buy a net $45 billion of long-term securities in January, based on the median of five estimates in a Bloomberg News survey.

International investors sold a net $8.4 billion in U.S. corporate debt in January, the report showed. Net foreign purchases of Treasury notes and bonds were a net $10.7 billion in January after buying of $15 billion a month earlier.

Agency Debt

Foreign demand for U.S. agency debt from companies such as Fannie Mae and Freddie Mac continued to slide, with net sales of $22.5 billion, the fourth straight month of selling.

Net foreign purchases of U.S. equities were $1.4 billion in January, after net purchases of $3.9 billion the previous month.


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Op maandag 16 maart 2009 23:59 schreef digitaLL het volgende:

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Bloomberg

Ra ra wie die gaten opvult.
Juist ome Bernanke want het gaat zo goed met de geldpers dat een paar extra palletjes dollars printen geen probleem is.

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Fed to Buy $300 Billion of Longer-Term Treasuries

The Federal Reserve opened a new front in its battle to bring down borrowing costs across the economy, pledging to buy as much as $300 billion of Treasuries and stepping up purchases of mortgage bonds.

The announcement following the Federal Open Market Committee meeting today in Washington spurred the biggest rally in longer-dated Treasuries in decades. Officials unanimously voted to expand the Fed’s balance sheet up to $1.15 trillion, and said they may broaden a program aimed at boosting consumer loans to include other assets, today’s statement showed.

With today’s move, the Fed has committed to buy or loan against everything from corporate debt, mortgages and consumer loans to government debt, after cutting its benchmark interest rate to zero failed to end the credit crunch. The unprecedented campaign comes after a worsening recession sent the unemployment rate up to a quarter-century high of 8.1 percent.

“The FOMC may believe the economy is nowhere near a bottom,” William Poole, former president of the St. Louis Fed, said in an interview today with Bloomberg News. “The Fed is engaging in a massive quantitative easing.”

Quantitative easing refers to using injections of funds into the economy as the main policy tool. Poole is now a senior economic adviser to Merk Investments LLC in Palo Alto, California, and a contributor to Bloomberg News.
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The Fed has cut the benchmark rate from 5.25 percent, beginning in September 2007, as credit froze and the economy buckled. Policy makers are now focused on how to further channel money to the economy.The Fed has already committed to buying $600 billion of mortgage-backed securities and bonds sold by government-sponsored housing agencies.

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Freddie lost more than $50.1 billion last year and has so far requested $44.6 billion in capital from Treasury. Fannie booked $58.7 billion in losses last year and said it needs $15.2 billion in aid.

“As the previous senior management teams left, it would have been catastrophic to lose the next layers down and other highly experienced employees,” Lockhart said in a March 18 e- mailed statement, noting that the companies purchased 73 percent of all mortgages originated last year. Lockhart said “it was critical to retain their most important asset -- their employees -- who are being asked to play a vital role in the nation’s economic recovery.

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Op vrijdag 20 maart 2009 20:21 schreef sitting_elfling het volgende:
En het probleem is? verwachte inflatie? Het feit dat de USA fanny en freddo nooit hebben moeten oprichten?

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Fannie, Freddie Need Less Aid With Accounting Change, FHFA Says


By Dawn Kopecki

April 2 (Bloomberg) -- Fannie Mae and Freddie Mac, the mortgage-finance companies that have taken $60 billion in taxpayer-funded capital, will have less need for additional aid under new accounting rules for losses, their regulator said.

The Financial Accounting Standards Board, or FASB,approved rules today that give financial companies more latitude to use their judgment, instead of market prices, in determining changes in the value of assets, including mortgage-backed securities. The rule can be applied to first-quarter results and beyond.

The change has “the potential to have a positive effect on both earnings and shareholders’ equity, which would decrease potential future draws” by Fannie and Freddie from a $400 billion emergency Treasury fund, Corrine Russell, a spokeswoman for the Federal Housing Finance Agency, said in an interview.

The Treasury on March 31 injected $15.2 billion into Washington-based Fannie and $30.8 billion into McLean, Virginia- based Freddie, the companies said in separate filings to the Securities and Exchange Commission yesterday. Freddie also tapped $13.8 billion from the fund in November.

The Treasury payouts were made through investments in the companies’ preferred stock as part of a financing arrangement set up after the government seized Fannie and Freddie in September amid concern that the two largest mortgage-finance companies in the U.S. may fail. The companies must pay a minimum dividend of 10 percent on the investments.

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Fannie, Freddie Defaults Rise as Borrowers Cite Lower Income

By Dawn Kopecki

April 21 (Bloomberg) -- Fannie Mae and Freddie Mac mortgage delinquencies among the most creditworthy homeowners rose 50 percent in a month as borrowers said drops in income or too much debt caused them to fall behind, according to data from federal regulators.

The number of so-called prime borrowers at least 60 days behind on mortgages owned or guaranteed by the companies rose to 743,686 in January, from 497,131 in December, and is almost double the total for October, the Federal Housing Finance Agency said in a report to Congress today.

Of all borrowers who ended up in default, 34 percent told Fannie and Freddie they were earning less money, about 20 percent cited excessive debt as a reason for missing mortgage payments, and 8.1 percent blamed unemployment, FHFA said.

Fannie and Freddie are the largest U.S. mortgage-finance companies, owning or guaranteeing 56 percent of all U.S. home loans. Regulators seized Fannie and Freddie in September and forced out top management after examiners said the companies’ capital may be inadequate to weather the worst housing market since the Great Depression.

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136 Teletekst wo 22 apr
***************************************
Kort nieuws buitenland

***************************************
` David Kellermann,de financieel topman
van hypotheekverstrekker Freddie Mac,is
dood gevonden in zijn kelder.Hij zou
zelfmoord hebben gepleegd.Freddie Mac
kwam in moeilijkheden door het inzakken
van de Amerikaanse huizenmarkt.Ondanks
de crisis kreeg de top van het bedrijf
flinke bonussen.Daarover moest Freddie
Mac nog verantwoording afleggen.David
Kellermann was 41 jaar

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Uiteindelijk zullen bijna alle hypotheken via de USgov lopen omdat evt investeerders inzien dat de risicopremie te hoog is en die kunnen ze niet inprijzen in de hypotheekrente.

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Mortgage Bondholders Form Battle Lines Over Obama Housing Plan
By Jody Shenn

April 23 (Bloomberg) -- The head of Greenwich Financial Services LLC warned bond investors in Washington last month that government efforts to reverse the housing slump are doing more harm than good by undermining debt contracts.

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Bondholders are preparing for a fight over legislation approved last month by the House of Representatives that would shield companies that collect homeowners’ payments from lawsuits over modified mortgages, even if new terms harm investors. The government’s actions may increase borrowing costs because creditors would demand higher returns to compensate for the risk that once-sacrosanct investment terms can be changed, they say.
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Op donderdag 23 april 2009 17:22 schreef sitting_elfling het volgende:
Hoe wil jij het probleem eigenlijk oplossen DigitaLL? Ik neem aan dat men over het algemeen er van uit gaat dat de echte shit nog niet boven is.

Is TARP a Criminal Enterprise ? part 1/2

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Op donderdag 23 april 2009 20:51 schreef henkway het volgende:

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Dat zou betekenen het einde van pensioenfonds APG ofwel ABP