Fannie Mae and Freddie Mac about to take off big time.

[swchandler]

With exceedingly low interest rates for an extended period of time, I can see how FnF have been able to turn things around, especially in light of depressed housing values over the last several years. However, one wonders how everything will evolve, if and when interest rates begin to climb. With strict requirements on borrowing being sustained into the future, one can anticipate a slowing of demand, especially if the growth of the economy remains very sluggish and slow. Maybe this kind of outlook unnecessarily injects a certain amount of potential instability and negativity that could be looming around the corner, but one must keep a certain degree of caution in the picture.

[thombiz]

There is buzz getting around that FnF will be released from conservatorship either today, tomorrow, or Thurs. The stock will rise very very fast.

[isobars]

[thombiz]

Agreed! Check these ads from the mid 2000's Go down the sheet until you see the video panel and play the videos: http://m.theweek.com/article/index/249480/5-commercials-for-subprime-mortgage-loans-from-before-the-financial-crisis



Freddie Mac announces quarterly earnings to be made public on Thurs 11/6
https://finance.yahoo.com/news/freddie-mac-sets-release-date-213842032.html

[thombiz]

FnF together contributed money and created a separate corporation called "Common Securitization Solutions" or CSS for short. CSS is set to help entities other than FnF in the creation of mortgage backed securities. Today, FnF named CSS's CEO and Board Members. FnF will not be wound down and eliminated. but their role in mortgage backed securities may be reigned in.

https://finance.yahoo.com/news/ceo-board-members-named-common-210000369.html

Also, evidently FnF are now being twitted on in StockTwits. This suggested they will very soon be moved from Over the Counter to a major stock board like NYSE. A few months back, FnF announced job opening for someone with specific experience with getting corporations listed on the New York Stock Exchange. That position has been filled.

[thombiz]

I found this post by Ron Luhmann:

IMF news: A Loosening of GSE Credit? Not in the Third Quarter of 2014

Top residential sellers to Fannie Mae and Freddie Mac appear to be focusing even more on lower-risk mortgages, according to a new Inside Mortgage Trends analysis of loan-level MBS data.

Some 62.9 percent of loans delivered in the third quarter had credit scores of 740 or higher, up from 61.9 percent in the second quarter and 60.5 percent in the first three months of the year. The data exclude mortgages with loan-to-value ratios exceeding 97 percent as well as loans with credit scores below 620, brackets used by the Federal Housing Finance agency in its analysis of MBS guaranty fee pricing.

The biggest chunk of Fannie/Freddie business comes from mortgages with high credit scores and LTV ratios below 80 percent, which accounted for 46.3 percent of third-quarter business. The Federal Housing Finance Agency has talked about loosening credit standards and is expected to release a formal proposal as early as this month.

For an exclusive table on GSE business by credit score over the past three quarters, see the new edition of Inside Mortgage Trends, now available online.


FnF's mortgages are just about the most pristine in their history! That means profits!

[thombiz]

We have a little time, so I have a story to share with you. I consider myself somewhat bright (subject to individual evaluation), but I have a friend who is off the charts. His name is Gerald McMorrow. We both grew up in a little farming community in western Washington called Chimacum. I have known Gerald since he was about 10 years old. He is really an unassuming guy, modest, but quick as a whip. We graduated Chimacum HS together and went off to college. Gerald was a bit immature and spent more time doing other things than studying. This would be about 1970. He let his grades slip, got drafted and became a grunt in Vietnam. His year in Nam was very much like "Hamburger Hill" only it lasted for the whole year. I lost track of him. I got my draft notice, but joined the safety of the Air Force and went to Nam. Fast forward to 1973. I'm back from Nam and attending UofWash, and walking down thru campus one day I see Gerald. I can't believe it. He made it back and didn't get killed. I was relieved and happy beyond belief. He was about to graduate from UW with and Elec. Engineering degree finishing his Masters "Cum Laude". I loose track of him for 30 years, but finally track him down. He worked for Tektronics, then Fluke. At Fluke, he met the guy who invented the Heart Defibulator. They decided to form their own company, but the heart defibulator guy was a centa'millionaire and quickly lost interest and went his own way. Gerald kept on. Over a couple years he invented something call Bladder-Scan and got it patented and built and marketed on a global level. Bladder-Scan is a non-invasive way to use ultrasound and a proprietary algorithm to determine bladder volume. You can quickly scan the bladder determining the volume then come back a set time later and check it again and determine kidney function. The thing was a huge success.

After Bladder Scan, Gerald used some of the profits to purchase the patent of a device invented by a Doctor in Vancouver, Canada. Gerald perfected the device, built it, and marketed it on a global scale thru his company called Verathon. That device is called Glidescope. It is an intubation system that uses a camera and screen to guide intubation. Prior to this, intubation was a braille process. It went huge on a global scale. In 2008, Gerald sold Verathon for about $386 million. Trying to figure what to do next, he chanced upon an interesting device someone else had been working on. He bought the rights to it, perfected it, thru clinical trials, and it is about to hit the streets. This is the cool part. This new device is being developed by a company called Cerevast in the Seattle area. Gerald is one of the directors of the board. The device is........drumroll.....Clotbust-ER. It is an ultrasound device that within seconds stops a stroke in it's tracks. Yes, it STOPS STROKES! Is that cool or what! It is operator independent, when used with microballoons and activase , the ultrasound causes the microballoons to agitate, and this agitation of the microballoons in the presence of activase breaks the fibrin holding the blood cells together to form a clot and quickly disperses the blood cells throughout the blood stream. Is that cool or what!
http://www.cerevast.com/stroke/

[thombiz]

This is a pic of the naivety of high school days. I already told you about Gerald -lower right. Above him is Mike Sedlack. He became the first person to write the history of education in the US. He is now Associate Dean, professor, and honored scholar at Michigan State U. To the left of Mike is Ed Snyder. About 4 years ago, he was chosen professor of the year for the whole state of West Virginia. His specialty is earth sciences. My pic is below his. I'm the slacker in the group. Turns out, my talent is making other people into millionaires. Our high school class was the biggest in the history of the school, 50 kids. Who would have ever guessed?

[thombiz]

Enough of that, back to business:
http://online.barrons.com/articles/SB50001424053111904544004579642543253085798

“Holders of the common and preferred equity in Fannie Mae (ticker: FNMA) and Freddie Mac (FMCC), the two secondary mortgage giants operating under federal conservatorship, could hit the jackpot via privatization if the GOP takes control of Congress, according to Newedge. Sen. Richard Shelby of Alabama would become chairman of the Senate Banking Committee, which has jurisdiction over Fannie and Freddie. He has been advocating privatization of federally chartered companies for years”

Well, the GOP won the Senate and Sen. Richard Shelby will likely become chairman of the Senate Banking Committee.

[thombiz]

The Dems are busy trying to figure out how to make the best political advances from the elections and the future release of FnF from conservatorship. My source suggests the release of FnF from conservatorship may be delayed a little bit, but it won't be long.