orthopa Posted January 25, 2018 Share Posted January 25, 2018 https://www.americanbanker.com/news/small-nonbanks-send-gse-reform-wish-list-to-senate https://www.americanbanker.com/news/backers-of-senate-gse-plan-reject-claims-that-its-too-conservative Lots to chew on in these articles Link to comment Share on other sites More sharing options...
investorG Posted January 25, 2018 Share Posted January 25, 2018 https://www.americanbanker.com/news/small-nonbanks-send-gse-reform-wish-list-to-senate https://www.americanbanker.com/news/backers-of-senate-gse-plan-reject-claims-that-its-too-conservative Lots to chew on in these articles the rumored senate bill and FHFA/moelis aren't completely different, imo. in the end, almost certainly attached to any potential reform is the end of the duopoly (i.e. more competition) and the removal of the implied guarantee model. it's also likely, but not certain, that an explicit guarantee will come on the securities. whether the guarantors are utilities or the # of competitors or transition details, etc. are likely overcome-able differences. I now believe the corker bill has a greater chance of passing than most. the bankers are acting desperate. hopefully they'll retire the sr pref. if that happens, the jr pref and common should get some proceeds, in that order, either in the form of shares in the new companies or over time in a legacy portfolio rundown receivership scenario. in the mean time, i'm guessing the pref are dealing with the unwind of hf positions who were hoping for admin reform and/or perhaps using the warrants for infrastructure. Link to comment Share on other sites More sharing options...
hardincap Posted January 25, 2018 Share Posted January 25, 2018 “If this effort falls apart, in a year we’ll have a conservative FHFA director and Trump administration working as aggressively as they can to reduce the government's role in this market, and anyone who cares about progressive housing policy will regret that we let this moment pass without doing more to help.” im trying to take parrott's comment here at face value but its hard Link to comment Share on other sites More sharing options...
Luke 532 Posted January 25, 2018 Share Posted January 25, 2018 https://www.insidemortgagefinance.com/imfnews/1_1280/daily/mba-says-gse-reform-will-do-no-harm-to-fannie-and-freddie-1000044545-1.html January 25, 2018 MBA’s Prediction on GSE Reform: the Legislation will do ‘No Harm’ to Fannie and Freddie By Paul Muolo pmuolo@imfpubs.com The Senate Banking, Housing and Urban Affairs Committee this week continued to work on housing-finance reform legislation, with the hope that a bipartisan bill can still be cobbled together in a dysfunctional Congress. As for passage this year, that’s a different matter. In a statement issued to Inside Mortgage Finance, Sen. Mark Warner, D-VA – a key player in the process – said he is still interested in the topic, noting the panel wants a “viable simplified approach that protects the taxpayer, preserves the 30-year fixed-rate mortgage, and includes robust access and affordability provisions.” The lawmaker provided no details, but stakeholders involved in the process contend the committee is working on a draft bill that has the backing of Treasury Department and the Federal Housing Finance Agency. Most of the work is being done by the staffs of Warner and Sen. Bob Corker, R-TN, with the blessing of committee Chairman Mike Crapo, R-ID. Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. Link to comment Share on other sites More sharing options...
Midas79 Posted January 25, 2018 Share Posted January 25, 2018 https://www.americanbanker.com/news/small-nonbanks-send-gse-reform-wish-list-to-senate https://www.americanbanker.com/news/backers-of-senate-gse-plan-reject-claims-that-its-too-conservative Lots to chew on in these articles the rumored senate bill and FHFA/moelis aren't completely different, imo. in the end, almost certainly attached to any potential reform is the end of the duopoly (i.e. more competition) and the removal of the implied guarantee model. it's also likely, but not certain, that an explicit guarantee will come on the securities. whether the guarantors are utilities or the # of competitors or transition details, etc. are likely overcome-able differences. I now believe the corker bill has a greater chance of passing than most. the bankers are acting desperate. hopefully they'll retire the sr pref. if that happens, the jr pref and common should get some proceeds, in that order, either in the form of shares in the new companies or over time in a legacy portfolio rundown receivership scenario. in the mean time, i'm guessing the pref are dealing with the unwind of hf positions who were hoping for admin reform and/or perhaps using the warrants for infrastructure. You bring up a good point: the parts on which all the different proposals agree will almost certainly be part of the new system going forward. The implicit guarantee is gone, explicit catastrophic backstop is likely, and at least 1-2 more competitors is a strong possibility. The part I bolded seems contradictory. Aren't Corker and the TBTF banks on the same side here? I believe that the names Fannie Mae and Freddie Mac are not long for this world. I love the way that renaming the companies is called a "ritual sacrifice" to appease Rs. Very fitting. Those same Rs probably would not be the wiser if two basically identical companies take their place, operating the way Fannie and Freddie do right now (as opposed to in the past, which is the phantom that these Rs fight so hard against). I can't say the recent price movement hasn't been disappointing, but I don't see any reason to sell at this point. Link to comment Share on other sites More sharing options...
Midas79 Posted January 25, 2018 Share Posted January 25, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 25, 2018 Share Posted January 25, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. Link to comment Share on other sites More sharing options...
TonyG Posted January 25, 2018 Share Posted January 25, 2018 Regarding the backing of Treasury and FHFA, i remember Craig Phillips saying Mnuchin met with C/W and saying he's supportive of them coming together for a bipartisan bill. Not that he's backing what they are putting into the bill yet. Big difference Link to comment Share on other sites More sharing options...
rros Posted January 25, 2018 Share Posted January 25, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. His crusade had leftist Obama's backing who said in an interview in 08' before becoming President speculators and shareholders will not profit from FF's debacle. I have not heard Trump or Mnuchin said anything like it. David Stevens obviously lost his leftish cover and with that, his prior stance. Parrot now seems to be standing on quick sand too. And Peter Wallison just called the Treasury Dpt. "rogue". If any bill effort fails, it will be more Moelis and less Watt/FHFA. Parrot's feared move to the right. I continue to believe any actor making moves in the background has understood that hurting investors/shareholders will be frown upon. Hopefully, the senate bill will reflect that. Link to comment Share on other sites More sharing options...
brker_guy Posted January 25, 2018 Share Posted January 25, 2018 Something to share with you guys: https://www.marketplace.org/2018/01/24/business/corner-office-divided-decade/fannie-mae-ceo-reflects-housing-10-years-after Note Tim Mayopoulos' words on getting release from the US Govt's shackle... Link to comment Share on other sites More sharing options...
Midas79 Posted January 25, 2018 Share Posted January 25, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. I didn't mean to imply that you didn't know that. I should have elaborated more: Stevens's anti-hedge fund rhetoric in the past means that he could say that while Fannie and Freddie wouldn't be harmed, the same may not be true for shareholders. On second thought I don't see how that is possible, unless we see massive dilution to commons and dividends stay turned off for a long time. Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 25, 2018 Share Posted January 25, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. I didn't mean to imply that you didn't know that. I should have elaborated more: Stevens's anti-hedge fund rhetoric in the past means that he could say that while Fannie and Freddie wouldn't be harmed, the same may not be true for shareholders. On second thought I don't see how that is possible, unless we see massive dilution to commons and dividends stay turned off for a long time. Rechartering to a private mutualized model comes to mind. Link to comment Share on other sites More sharing options...
Midas79 Posted January 25, 2018 Share Posted January 25, 2018 His crusade had leftist Obama's backing who said in an interview in 08' before becoming President speculators and shareholders will not profit from FF's debacle. I have not heard Trump or Mnuchin said anything like it. David Stevens obviously lost his leftish cover and with that, his prior stance. Parrot now seems to be standing on quick sand too. And Peter Wallison just called the Treasury Dpt. "rogue". If any bill effort fails, it will be more Moelis and less Watt/FHFA. Parrot's feared move to the right. I continue to believe any actor making moves in the background has understood that hurting investors/shareholders will be frown upon. Hopefully, the senate bill will reflect that. The Stevens comments I was thinking of have been since Trump was elected. He had this to say about the Moelis plan: “This proposal is clearly self-serving and designed to confuse unsuspecting, innocent taxpayers into supporting a plan that is intended to line the pockets of hedge funds who invested in Fannie and Freddie,” said David Stevens, president of the Mortgage Bankers Association. MBA has called on Congress to re-charter the GSEs as regulated utilities, and allow for other guarantors to enter as competitors. “MBA has been clear that the self-interests of stock speculators and profit-seekers are not in the best interests of either the taxpayer or the housing system,” Stevens said. “The only solution to reforming Fannie and Freddie is through the legislative process.” http://www.scotsmanguide.com/News/2017/06/Shareholders--GSE-reform-can-happen-quickly/ As for Parrott's comments about FHFA moving to the right in 2019, I see those as scare tactics to get the Ds to support what the Rs want right now. He's saying "if you think this version of housing finance reform is too conservative, you don't want to know what the 2019 version will be like!". It's all bluster because the FHFA director doesn't have nearly that much power, and if the Ds gain control of Congress they will have much more say in what happens next. The fight over the direction and even constitutionality of FHFA would be just like the current one over the CFPB with the parties reversed. Link to comment Share on other sites More sharing options...
investorG Posted January 25, 2018 Share Posted January 25, 2018 https://www.americanbanker.com/news/small-nonbanks-send-gse-reform-wish-list-to-senate https://www.americanbanker.com/news/backers-of-senate-gse-plan-reject-claims-that-its-too-conservative Lots to chew on in these articles the rumored senate bill and FHFA/moelis aren't completely different, imo. in the end, almost certainly attached to any potential reform is the end of the duopoly (i.e. more competition) and the removal of the implied guarantee model. it's also likely, but not certain, that an explicit guarantee will come on the securities. whether the guarantors are utilities or the # of competitors or transition details, etc. are likely overcome-able differences. I now believe the corker bill has a greater chance of passing than most. the bankers are acting desperate. hopefully they'll retire the sr pref. if that happens, the jr pref and common should get some proceeds, in that order, either in the form of shares in the new companies or over time in a legacy portfolio rundown receivership scenario. in the mean time, i'm guessing the pref are dealing with the unwind of hf positions who were hoping for admin reform and/or perhaps using the warrants for infrastructure. You bring up a good point: the parts on which all the different proposals agree will almost certainly be part of the new system going forward. The implicit guarantee is gone, explicit catastrophic backstop is likely, and at least 1-2 more competitors is a strong possibility. The part I bolded seems contradictory. Aren't Corker and the TBTF banks on the same side here? I believe that the names Fannie Mae and Freddie Mac are not long for this world. I love the way that renaming the companies is called a "ritual sacrifice" to appease Rs. Very fitting. Those same Rs probably would not be the wiser if two basically identical companies take their place, operating the way Fannie and Freddie do right now (as opposed to in the past, which is the phantom that these Rs fight so hard against). I can't say the recent price movement hasn't been disappointing, but I don't see any reason to sell at this point. the bankers are acting desperate in that they are flooding the media with articles and often stating outrageous claims in them. they likely see august as perhaps the last time they'll deal with a republican house. it's now or bust for them. and hopefully to get some of their goals, they'll have to be flexible on others. Link to comment Share on other sites More sharing options...
rros Posted January 25, 2018 Share Posted January 25, 2018 His crusade had leftist Obama's backing who said in an interview in 08' before becoming President speculators and shareholders will not profit from FF's debacle. I have not heard Trump or Mnuchin said anything like it. David Stevens obviously lost his leftish cover and with that, his prior stance. Parrot now seems to be standing on quick sand too. And Peter Wallison just called the Treasury Dpt. "rogue". If any bill effort fails, it will be more Moelis and less Watt/FHFA. Parrot's feared move to the right. I continue to believe any actor making moves in the background has understood that hurting investors/shareholders will be frown upon. Hopefully, the senate bill will reflect that. The Stevens comments I was thinking of have been since Trump was elected. He had this to say about the Moelis plan: “This proposal is clearly self-serving and designed to confuse unsuspecting, innocent taxpayers into supporting a plan that is intended to line the pockets of hedge funds who invested in Fannie and Freddie,” said David Stevens, president of the Mortgage Bankers Association. MBA has called on Congress to re-charter the GSEs as regulated utilities, and allow for other guarantors to enter as competitors. “MBA has been clear that the self-interests of stock speculators and profit-seekers are not in the best interests of either the taxpayer or the housing system,” Stevens said. “The only solution to reforming Fannie and Freddie is through the legislative process.” http://www.scotsmanguide.com/News/2017/06/Shareholders--GSE-reform-can-happen-quickly/ As for Parrott's comments about FHFA moving to the right in 2019, I see those as scare tactics to get the Ds to support what the Rs want right now. He's saying "if you think this version of housing finance reform is too conservative, you don't want to know what the 2019 version will be like!". It's all bluster because the FHFA director doesn't have nearly that much power, and if the Ds gain control of Congress they will have much more say in what happens next. The fight over the direction and even constitutionality of FHFA would be just like the current one over the CFPB with the parties reversed. Yes to Parrot and scare tactics. Felt the same. Maybe Stevens got a slap on the wrist after that comment? Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 26, 2018 Share Posted January 26, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. I didn't mean to imply that you didn't know that. I should have elaborated more: Stevens's anti-hedge fund rhetoric in the past means that he could say that while Fannie and Freddie wouldn't be harmed, the same may not be true for shareholders. On second thought I don't see how that is possible, unless we see massive dilution to commons and dividends stay turned off for a long time. Rechartering to a private mutualized model comes to mind. Does nobody else see this as the only realistic downside scenario at this point? Link to comment Share on other sites More sharing options...
investorG Posted January 26, 2018 Share Posted January 26, 2018 Dave Stevens, president of the Mortgage Bankers Association, said he anticipates that the bill that finally emerges “will do no harm to Fannie [Mae] and Freddie [Mac].” For full details, see the new edition of Inside Mortgage Finance. I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. I didn't mean to imply that you didn't know that. I should have elaborated more: Stevens's anti-hedge fund rhetoric in the past means that he could say that while Fannie and Freddie wouldn't be harmed, the same may not be true for shareholders. On second thought I don't see how that is possible, unless we see massive dilution to commons and dividends stay turned off for a long time. Rechartering to a private mutualized model comes to mind. Does nobody else see this as the only realistic downside scenario at this point? it's a risk, yes. the House Republicans might even put out a bill featuring it. on the other hand it's not what the banks seemingly prefer and not what FHFA is focusing on. we'll have to see what mnuchin says. there are other risks, too, given all of the variables. Link to comment Share on other sites More sharing options...
Midas79 Posted January 26, 2018 Share Posted January 26, 2018 Rechartering to a private mutualized model comes to mind. What exactly does that mean? Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 26, 2018 Share Posted January 26, 2018 http://www.stern.nyu.edu/sites/default/files/assets/documents/A%20More%20Promising%20Road%20to%20GSE%20Reform%3A%20Why%20It%20Leads%20to%20a%20Government%20Corporation.pdf Link to comment Share on other sites More sharing options...
orthopa Posted January 26, 2018 Share Posted January 26, 2018 Another big volume day in FNMAS with little movement in price. Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 26, 2018 Share Posted January 26, 2018 On another note- probabilistically speaking I think we will ultimately see a win-win-win ultimately. MBA gets their explicit guarantee & shareholders get some/all of par back. Consisten w Ackman being on board with whatever plan is being written behind the scenes + Stevens stating f/f aren't going away. Banks love Mnuchin for the explicit guarantee and fund 2020 election, shareholders do well in regulated utility model. All largely consistent w FHFAs proposal. Also- interesting to me that Stevens stated in October that he was worried FHFA would initiate capital buffer AND he mentioned that "fairly soon - perhaps weeks" that principles would be released by Treasury. I bet the fhfa principles that just came out are the ideas of Mnuchin and team - but optically looked better coming from FHFA. Total speculation. Link to comment Share on other sites More sharing options...
Cox022 Posted January 30, 2018 Share Posted January 30, 2018 did i hear a somewhat shareholder-friendly tone from corker? Was he implying he recognizes fair treatment for the parties involved? What did you guys hear? Maybe I was just hearing what I wanted to hear. I'm referring to the Senate Banking Committee hearing going on right now with Mnuchin Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 30, 2018 Share Posted January 30, 2018 Is there any way of watching a replay of this? Right now? Link to comment Share on other sites More sharing options...
Cox022 Posted January 30, 2018 Share Posted January 30, 2018 sorry snarky, idk. I think Joe Light has the quotes right in a twitter thread. Link to comment Share on other sites More sharing options...
rros Posted January 30, 2018 Share Posted January 30, 2018 Is there any way of watching a replay of this? Right now? https://www.banking.senate.gov/public/index.cfm/hearings?ID=E073F06D-48F0-4013-9645-61BF4431C57A Link to comment Share on other sites More sharing options...
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