navycmdr
8 hours ago
Interestingly, former White House housing official Jim Parrott, who joined Calabria
for the CHLA roundtable discussion,
said a Kamala Harris-led administration could also remove the GSEs from conservatorship.
Under that scenario, “they will try to find ways to bake what we have in conservatorship that they like in in a way that is durable outside of conservatorship,” Parrott said. “And they think about the GSEs as some mission-focused utility, agnostic as to ownership — privately-owned, government corporation, whatever. But they will move in that direction.”
Fannie and Freddie aren’t going private anytime soon, Mark Calabria says
The former FHFA leader said that the GSEs won’t exit conservatorship in 2025,
but the chances are much higher by 2027 under a Trump regime
September 17, 2024, 1:38 pm - By James Kleimann
If Donald Trump wins a second term in the White House, he’s going to attempt to return Fannie Mae and Freddie Mac to private status after more than 16 years under federal conservatorship. That’s according to Mark Calabria, the former head of the Federal Housing Finance Agency (FHFA) under Trump.
As for the mechanics of removing the government-sponsored enterprises (GSEs) from conservatorship, Calabria said it would take several years to pull off. He noted there are detailed plans in place from when he was last in charge of the FHFA and Steven Mnuchin was the secretary of the U.S. Department of the Treasury.
“A new Treasury secretary is also probably going to have to go through six to nine months of doing the rounds, and talking to people and hearing the enthusiasm, before they figure out that Congress isn’t going to do anything,” Calabria said in remarks given Monday at a Community Home Lenders of America (CHLA) event in Washington, D.C.
“And so, if you start from the premise of ‘Congress is unlikely to do anything,’ then what do you have to do? There’s nothing about the conservatorship that changes the implied guarantee. Despite what maybe some people in capital markets may believe, there’s no guarantee in conservatorship; there’s no guarantee out of conservatorship.”
The chances of the agencies going private in 2025 is “zero,” Calabria said. “But by [2027] I would say there’s maybe 70% chance. … Almost every decision you think you have to make, we scoped out. All those millions of dollars with my go ahead, low-key actually produced documents. So, there are plans; there are options. You can get them out. It’s all feasible, doable.”
Last week, The Wall Street Journal reported that several Trump allies have been working since the spring on a plan to remove the GSEs from conservatorship.
One element of the proposed plans include “having the Treasury Department partially back a certain amount of Fannie and Freddie loans through a so-called standby guarantee,” according to WSJ sources. “[This is] similar to the way the Federal Deposit Insurance Corp. (FDIC) backs deposits below a certain threshold at banks.”
Regarding paths to privatization, one discussed method is to reportedly bypass both houses of Congress and instead commence the process through the FHFA. The agency would be “key to any plan,” the report said, since it establishes the GSEs’ capital requirements. Any additionally derived value from the GSEs could be divided between the government and GSE shareholders, which could avoid drawn-out and costly legal proceedings.
Interestingly, former White House housing official Jim Parrott, who joined Calabria for the CHLA roundtable discussion, said a Kamala Harris-led administration could also remove the GSEs from conservatorship.
Under that scenario, “they will try to find ways to bake what we have in conservatorship that they like in in a way that is durable outside of conservatorship,” Parrott said. “And they think about the GSEs as some mission-focused utility, agnostic as to ownership — privately-owned, government corporation, whatever. But they will move in that direction.”
https://www.housingwire.com/articles/fannie-freddie-not-going-private-mark-calabria/?cx_testId=3&cx_testVariant=cx_1&cx_artPos=1&cx_experienceId=EXZNOASUT0V6&cx_experienceActionId=showRecommendations1PUX5DNS13CDGZ3#cxrecs_s
Could Kamala Harris’ ambitious housing plan actually pass? Maaaybe
According to Obama-era adviser Jim Parrott, there are pieces of the proposal
that Republicans could be open to
September 17, 2024, 2:23 pm By James Kleimann
A historic rise in home prices and nearly three years of high mortgage rates have put housing issues front and center in the 2024 presidential campaign. Kamala Harris has outlined an ambitious vision for housing that would involve the construction of 3 million new homes in four years.
At a policy discussion on Monday hosted by the Community Home Lenders of America (CHLA), Parrott Ryan Advisors owner Jim Parrott — a former White House housing policy leader during the Obama administration — said that Harris’ plan is heavy on supply-side initiatives. And that’s a good thing.
Parrott pointed to four key components:
🏡 Expanding the Low Income Housing Tax Credit (LIHTC) program by increasing the credits available and decreasing the bond amounts to make the math pencil out
🏡 Providing a similar tool for single-family homebuilders who build and sell a home to a first-time homebuyer
🏡 Tax credits that would make it economically feasible for builders to purchase and renovate buildings that are falling into obsolescence, a key strategy in several Rust Belt cities
🏡 A $40 billion catch-all fund to deal with local zoning constraints and shortfalls in infrastructure
The most well-known component of the plan — $25,000 in direct assistance for first-time homebuyers — would only kick in when supply-side elements have made an impact.
Will it pass? An enormous amount depends on the makeup of Congress come January. Parrott said there are pieces of the proposal that Republicans could be open to — and a huge debate over tax reform that is playing out at the same time helps.
“If her whole proposal were about supersizing grants or appropriations, then I would say forget it, it’s just a campaign thing,” Parrott said. “But because most of what she’s pushing is a supply-side push and is on the tax side, there will be a pretty broad constituency … pushing this from industry and among stakeholders.”
Down payment assistance, along with funding for communities with zoning or infrastructure needs, have a lower likelihood of passage because they are based on appropriations, Parrott said. But the updates to LIHTC and the builder tax credit proposal are more promising, he added.
Should Harris not receive the support needed to pass key elements of the plan, there is another option. She would likely look to pull “administrative levers” at the Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD), he said.
Trump housing initiatives
Meanwhile, Donald Trump‘s campaign has unveiled few specific housing policy proposals and has broadly tied the housing market to the overall economic climate. That’s according to Mark Calabria, the former head of the FHFA, who joined Parrott in the CHLA roundtable discussion.
He told the audience of lending executives that “jobs creation is a housing policy as well.” While the Harris campaign uses the existing framework, Trump is less likely to use the same toolkit, Calabria said. He noted that Trump would likely look at streamlining regulatory authority and doing some reforms around housing permits and land use to bring down the cost of housing.
“A lot of conversation in 2025 will be on individual taxes. … If I was a betting man, I would say it all gets extended for a year,” Calabria said, noting that neither candidate will have 60 votes in the Senate. “Things like the mortgage interest deduction, things like SALT (state and local taxes), perhaps things like tax credits on the buyer side or the builder side, all of that will be on the table.”
Calabria repeatedly said that the credit box expanded too much after he left the agency, which has driven up demand and reduced housing affordability. Trump would look to fix that administratively through the GSEs or its regulator, Calabria said.
Louie_Louie
1 day ago
Hey golfbum. I only get one post here and zero emoji's lol. I know, childish. Here's why I think Lamberth might be trying to hold off after election....
#1 Trump getting in would change the tone and approach of every GSE lawsuit.
#2 Lamberth being a Reagan man and Trump also, seems to give with a major middle of the road approach to the twins release which would piss off groups on both sides.
#3 Lamberth has taken too long as we all know.... Why? Is there an underlying method to the madness? Look at the first trial. He interfered lots, the jury was not unanimous, his instructions, the juror who left, numerous other extensions based on both plaintiff and gov.
#4 to me, it seems Lamberth is allowing carte blanche government appeal. This drives the award up, yes... But it opens the government to more litigation and possibly a bigger higher settlement (maybe).
#5 Chevron and it's implications. Lamberth was instructed by SCOTUS to determine damage done, what if he's fishing or angling to send this back to SCOTUS, especially if the plaintiff lawyers come up with a good anti Chevron way of challenging? Is it possible? IDK. Would SCOTUS rule differently on this case if the Chevron doctrine had been defeated like it has? I believe they absolutely would rule differently.
#6. The government is the only one procrastinating things so far. Some on these boards are supposing it's because the current admin wants to leave a Trump admin a large bill to pay. That tells you a few things... If true, they're very worried about his getting in. He wouldn't care about the bill, he'd pin on the current admin, justifiably, for not settling. He'd possibly even have his DOJ offer to drop the case and settle out of court, for possibly more, to avoid any further challenges. He knows litigation and how to cut it short.
#7. There's probably a few other reasons why Lambeth is slow walking this. Maybe good, maybe bad. I just wonder with him and Trump both being big Reagan fans, and him being appointed, there's maybe a connection ???
navycmdr
3 days ago
Trump Allies Are Working on Plans to Privatize Fannie and Freddie
A deal would call for the government to try to sell a chunk of its holdings in the mortgage giants to investors, including sovereign-wealth funds
https://www.wsj.com/politics/policy/trump-allies-are-working-on-plans-to-privatize-fannie-and-freddie-a9c4e5ff
Anna Maria Andriotis & Gina Heeb
Updated Sept. 13, 2024 12:02 am ET
Donald Trump’s allies want once again to try to untie the Gordian knot of the mortgage market: what to do with Fannie Mae and Freddie Mac.
Former Trump administration figures and bankers have been discussing plans on ending U.S. government control of the mortgage-finance giants should Trump win the presidential election, according to people familiar with the matter. The talks have been under way since at least this past spring and include reaching out to investment managers for advice on how to get the deal done.
Trump confidants including Larry Kudlow, former director of the National Economic Council, and John McEntee, former director of the White House presidential personnel office, are among those involved, the people said.
“The [former] president himself has never said anything about this throughout the campaign,” a Trump campaign spokeswoman said.
The government’s stakes in Fannie and Freddie could be valued at hundreds of billions of dollars, bankers estimate. That could allow the government to sell more than $100 billion of securities in one swoop, some bankers say. That would top the biggest stock and bond offerings in history and require interest from the largest investors, including sovereign-wealth funds.
Earlier efforts to free Fannie and Freddie from government control, including during Trump’s presidency, failed. Critics worried about the companies’ safety and the impact on the housing market, which relies on their backing. There were also doubts about whether bankers could actually drum up enough money.
A top focus of the talks is ensuring that the companies will be well capitalized so as to not pose a risk to the U.S. housing market. The role of Fannie and Freddie in funding 30-year mortgages, the foundation of the U.S. housing market, has hinged on the government’s full support.
The Trump allies have discussed having the Treasury Department partially back a certain amount of Fannie and Freddie loans through a so-called standby guarantee, the people said, similar to the way the Federal Deposit Insurance Corp. backs deposits below a certain threshold at banks.
Fannie and Freddie purchase and securitize a huge portion of loans in the U.S. residential and commercial mortgage markets. Nearly 40% of the $435 billion of residential loans originated in the second quarter were sold to Fannie or Freddie, according to Inside Mortgage Finance. The two firms owned or guaranteed roughly 40% of the $2.2 trillion in multifamily mortgage debt as of September 2023, according to estimates from their latest annual filings.
Fannie and Freddie operated with implicit government support when they were created but have been under full government control for 16 years. After a 2008 rescue, the Treasury Department took warrants to purchase about 80% of common stock at Fannie and Freddie, as well as senior preferred shares. Other investors can own junior preferred shares, which used to pay a dividend, or common stock.
Trump’s allies and other Republicans view privatizing the firms—or putting nongovernmental shareholders in control—as a way to reduce the country’s deficit and return money to taxpayers.
Opponents of privatization have said that it would decrease access to credit for home buyers and increase the risk for taxpayers.
Different paths being discussed
Trump’s allies are assessing different paths to privatization. One includes bypassing congressional approval and instead proceeding through the Federal Housing Finance Agency, which oversees Fannie and Freddie, and the Treasury Department, the people said.
The FHFA would be key to any plan. It sets the capital requirements and other standards for Fannie and Freddie.
The allies are discussing how to divide any newly found value between the government and other shareholders and avoid drawn-out legal battles.
The preferred and common shares had rallied after Trump’s 2016 election and his 2019 proposals to privatize the companies, only to fall during the Biden administration.
Big investors could profit
Some prominent hedge-fund investors, and Trump backers, have for years been pushing for Fannie and Freddie to be freed from government ownership. Depending on the plan, they could stand to profit handsomely.
Bill Ackman’s Pershing Square owns a roughly 10% stake in the common shares of both Fannie and Freddie.
John Paulson, who is viewed as a potential pick for Treasury secretary under Trump, owns a sizable investment in the preferred shares.
Both Paulson and Ackman have endorsed Trump for president.
“The conservatorship was always intended to be temporary so it makes sense that policymakers release them from conservatorship now that reforms are complete,” a Paulson spokesman said. “The government will be the biggest winner in a release of [Fannie and Freddie].”
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Gina Heeb at gina.heeb@wsj.com
Bullish
Bullish
navycmdr
6 days ago
Booom Booom Booom !
https://www.wsj.com/politics/policy/trump-allies-are-working-on-plans-to-privatize-fannie-and-freddie-a9c4e5ff
-Trump Allies Are Working on Plans to Privatize Fannie and Freddie
A deal would call for the government to try to sell a chunk of its holdings in the mortgage giants to investors, including sovereign-wealth funds
Anna Maria Andriotis
& Gina Heeb
Updated Sept. 13, 2024 12:02 am ET
Donald Trump’s allies want once again to try to untie the Gordian knot of the mortgage market: what to do with Fannie Mae and Freddie Mac.
Former Trump administration figures and bankers have been discussing plans on ending U.S. government control of the mortgage-finance giants should Trump win the presidential election, according to people familiar with the matter. The talks have been under way since at least this past spring and include reaching out to investment managers for advice on how to get the deal done.
Trump confidants including Larry Kudlow, former director of the National Economic Council, and John McEntee, former director of the White House presidential personnel office, are among those involved, the people said.
“The [former] president himself has never said anything about this throughout the campaign,” a Trump campaign spokeswoman said.
The government’s stakes in Fannie and Freddie could be valued at hundreds of billions of dollars, bankers estimate. That could allow the government to sell more than $100 billion of securities in one swoop, some bankers say. That would top the biggest stock and bond offerings in history and require interest from the largest investors, including sovereign-wealth funds.
Earlier efforts to free Fannie and Freddie from government control, including during Trump’s presidency, failed. Critics worried about the companies’ safety and the impact on the housing market, which relies on their backing. There were also doubts about whether bankers could actually drum up enough money.
A top focus of the talks is ensuring that the companies will be well capitalized so as to not pose a risk to the U.S. housing market. The role of Fannie and Freddie in funding 30-year mortgages, the foundation of the U.S. housing market, has hinged on the government’s full support.
The Trump allies have discussed having the Treasury Department partially back a certain amount of Fannie and Freddie loans through a so-called standby guarantee, the people said, similar to the way the Federal Deposit Insurance Corp. backs deposits below a certain threshold at banks.
Fannie and Freddie purchase and securitize a huge portion of loans in the U.S. residential and commercial mortgage markets. Nearly 40% of the $435 billion of residential loans originated in the second quarter were sold to Fannie or Freddie, according to Inside Mortgage Finance. The two firms owned or guaranteed roughly 40% of the $2.2 trillion in multifamily mortgage debt as of September 2023, according to estimates from their latest annual filings.
Fannie and Freddie operated with implicit government support when they were created but have been under full government control for 16 years. After a 2008 rescue, the Treasury Department took warrants to purchase about 80% of common stock at Fannie and Freddie, as well as senior preferred shares. Other investors can own junior preferred shares, which used to pay a dividend, or common stock.
Trump’s allies and other Republicans view privatizing the firms—or putting nongovernmental shareholders in control—as a way to reduce the country’s deficit and return money to taxpayers.
Opponents of privatization have said that it would decrease access to credit for home buyers and increase the risk for taxpayers.
Different paths being discussed
Trump’s allies are assessing different paths to privatization. One includes bypassing congressional approval and instead proceeding through the Federal Housing Finance Agency, which oversees Fannie and Freddie, and the Treasury Department, the people said.
The FHFA would be key to any plan. It sets the capital requirements and other standards for Fannie and Freddie.
The allies are discussing how to divide any newly found value between the government and other shareholders and avoid drawn-out legal battles.
The preferred and common shares had rallied after Trump’s 2016 election and his 2019 proposals to privatize the companies, only to fall during the Biden administration.
Big investors could profit
Some prominent hedge-fund investors, and Trump backers, have for years been pushing for Fannie and Freddie to be freed from government ownership. Depending on the plan, they could stand to profit handsomely.
Bill Ackman’s Pershing Square owns a roughly 10% stake in the common shares of both Fannie and Freddie.
John Paulson, who is viewed as a potential pick for Treasury secretary under Trump, owns a sizable investment in the preferred shares.
Both Paulson and Ackman have endorsed Trump for president.
“The conservatorship was always intended to be temporary so it makes sense that policymakers release them from conservatorship now that reforms are complete,” a Paulson spokesman said. “The government will be the biggest winner in a release of [Fannie and Freddie].”
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Gina Heeb at gina.heeb@wsj.com
navycmdr
1 week ago
Freddie Mac Names Industry Leader Diana Reid CEO
September 10, 2024 9:01 AM EDT Tweet Share E-mail
Transition to take place immediately !
MCLEAN, Va., Sept. 10, 2024 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced that its Board of Directors has selected real estate and financial services industry veteran Diana Reid to serve as the company’s chief executive officer (CEO), effective immediately. Ms. Reid also will serve as a member of Freddie Mac’s Board of Directors. President and Interim CEO Michael Hutchins will continue as the company’s president.
Ms. Reid brings more than four decades of banking, real estate, capital markets and affordable housing experience to Freddie Mac, most recently serving as an independent director and advisor to several organizations. She spent nearly 12 years leading PNC Financial Services Group, Inc.’s real estate business division through the financial crisis and on to a period of significant growth.
“I am pleased to announce that Freddie Mac’s Board of Directors concluded its comprehensive search and selected Diana Reid as the company’s next CEO,” said Lance Drummond, non-executive chair of Freddie Mac’s Board of Directors. “Diana’s proven track record and vast experience in housing finance, real estate and capital markets make her an excellent choice to further Freddie Mac’s mission-driven work. I have the utmost confidence that she is the right person to take Freddie Mac into the future.”
Drummond added, “On behalf of the Board, I thank Mike Hutchins for his leadership as interim CEO, which provided necessary stability and continuity for Freddie Mac’s important work. We are delighted to benefit from his continued leadership as the company’s president.”
Prior to her executive role at PNC, Ms. Reid founded Beekman Advisors, where she provided real estate finance company owners, CEOs and boards strategic advice and M&A execution. She spent nearly 20 years at the investment bank formerly known as Credit Suisse First Boston in Mortgage Trading, Debt Capital Markets, and Financial Institutions Advisory.
“It is an honor to join Freddie Mac and lead the company as it carries out its vital role in the housing finance market,” said Diana Reid. “I look forward to working with the Board, management and my colleagues at Freddie Mac to continue and expand the company’s contributions in providing liquidity, stability and affordability for housing in communities across the country, and to ensure the company’s safety and soundness for the next generation.”
Diana Reid is a member of the board of directors of Welltower, Inc. (NYSE: WELL), the advisory board of Pittsburgh Opera, and a founding board member of The Denyce Graves Foundation. She earned her Bachelor of Science degree from California State University and her Masters of Business Administration degree from University of Virginia’s Darden School of Business.
About Freddie Mac
Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website | Consumers | X | LinkedIn | Facebook | Instagram | YouTube
MEDIA CONTACT: Christopher Spina
703-388-7031
Christopher_Spina@FreddieMac.com
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trunkmonk
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Ace Trader
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RickNagra
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