James Lockhart of the OFHEO announced that as Fannie Mae and Freddie Mac are now filing timely statements, there would be some changes:
The federal regulator for Fannie Mae and Freddie Mac said on Wednesday it would lift an investment cap for the mortgage companies, in a move that will give them more flexibility to invest in the battered U.S. housing market.
The investment caps will be lifted on March 1, the Office of Federal Housing Enterprise Oversight said in a statement that cited the companies’ return to timely financial statements as one reason for its easing.
WASHINGTON (AP) – Fannie Mae on Wednesday said it lost nearly $3.6 billion in the fourth quarter of 2007 as home-loan delinquencies mounted. The company said it expects additional losses this year as the housing slump continues.
The quarterly loss at Fannie Mae, the largest U.S. buyer and backer of home loans, contrasts with a profit of $604 million in the same period a year earlier.
Fannie Mae reported the late 2007 loss was equivalent to $3.80 a share. It earned 49 cents a share a year earlier. Thomson Financial said Wall Street analysts had expected the company to lose $1.24 a share in the latest period.
The government-sponsored company was forced to set aside billions to account for bad loans.
CNBC stated:
The companies are still under orders to hold strong reserves against possible losses, which will limit their ability to expand their mortgage holdings in the short term.
It remains to be seen what the net result will be.
Northern Virginia Housing Bubble Fallout
Bubble Meter
UK House Bubble
Ohio Fraudclosure
Mish's Global Economic Analysis
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
And the stock jumped on the news.
So I bought Jan09 puts.
Igor says calamity
I didn’t bet that much.
Sort of off subject, but did anyone see Barney Frank’s rebuttal to Bernanke’s testimony this morning? It was quite amusing as Barney first praised him for his concern for the average joe and curbs to be put in place to prevent further loan abuse. He then lambasted him and his predecessors for never once taking on this issue in the past. The jig is up and Ben know’s it. But none of his buddies will ever give one dime back of their fat fees unless forced to. I tried to search for a video link but could’nt find one. Maybe someone more adept can. It’s worth posting, just for the stoic look on Ben’s face.
Profits are down? Gee, could this example have anything to do with it?
http://www.foreclosureexpert.info/2008/02/whose-afraid-to.html
Well I couldn’t find Barney but I did get a link to another follow up question from that other rascally fella RP. To his question why we don’t go back to the gold standard all Ben could say was “that’s up to Congress” Time to write our congresspeople.
http://www.cnbc.com/id/15840232?video=666233060
I feel sorry for Ben. His job is to try and prevent the worst from happening, or at least delay it for as long as possible, as Politicians and Wallstreet try to polish their images by blaming each other for the mess. Then again he did take the job.
Barney Frank: just another politician.
http://public.cq.com/docs/cqt/news110-000002575803.html
OOps wrong link
http://www.house.gov/frank/earmarks0807.html
Igor says wonky
Ouch.
You would think that at least one soul knew this was coming. Maybe there were even several of them, but excess profits could blind.
Mr. Maxwell. Your company(Fannie Mae) needs you again.
Shameless Plug: heres’s something related to this topic(We’re not getting our by Christmas,deal with it!):http://renomarketblog.typepad.com//reno/2008/02/were-not-gettin.html
Pardon my ignorant confusion, but I don\’t get it. How is raising the caps on GSE investments going to get anywhere? Don\’t they still need capital or credit? Where are they going to get that and who\’s going to give them credit?
Another thing, why would Freddie and Fannie want to \”buy\” mortgages when they have the option of just insuring them? And if they go the cheaper route of insuring mortgages – to make their capital go further, won\’t they stick to good or better loans? Won\’t \”iffy\” loans get rejected anyway?
So back to where we are today, tight credit, tougher lending standards. I\’m confused.
Deal Hunter-
The other confusing thing is an issue that I believe that was raised by Lockhart. If you want to “help” the maximum number of people, you can do three $200K loans or one $600K loan. Raising the conforming limit will reduce the number of people that could be financed/refinanced.
Freddie announced a few days ago that they would have to have higher fees on jumbos to compensate them for risk.
I don’t see how raising the conforming limit and/or caps does a thing for the GSEs or the housing market. The only possible boost is the psychological factor- to lull buyers into thinking it’s safe to go back in the water and to convince Americans that the government can and will fix the problem.
Twist -
What is “the problem” that the government can fix?
Don’t answer that, it was rhetorical.
Agnostic-
You had me worried for a moment there. I thought you were posing one of those “How many angels can fit on the head of a pin?” questions. : )
Agnostic-
And though I don’t know how many angels can fit on the head of a pin, I’m sure that if the government gets involved, fewer angels will fit and the pin will be a less pleasant place to be.
Twist-
But first yo gotta believe in angels, unless of course they are fiat angels then the sky’s the limit.
Bruce-
Fiat angels might be what the government is looking for. The White House could announce its “One Angel Per Pin Program”- no angel left behind.. Think of what it would do for the pin market!
Everybody spend your $600 on pins, and we’ll all be just fine.
I prefer golden angels. They’re prettier and no one will leave them behind.