Archive for the 'fannie mae' Category
More Texas Hold’em With Freddie
July 18th, 2008 Categories: Mortgage News, fannie mae, freddie mac
The Fannie Mae and Freddie Mac poker game is progressing…their chip stacks have diminished substantially but Freddie appears to be calling in a credit marker from the House…
We’ve seen The Flop…which may have been initiated by the Financial Accounting Standards Board almost 6 months ago.
From yesterdays post:
If I’m reading the table correctly, Fannie and Freddie’s stock is plummeting because stock holders are staring at the prospect of getting diluted by capital infusions (for a number of reasons) and dumping accordingly.
Now The Turn…
Read today over at Blown Mortgage:
…Freddie Mac, is mulling a possible $10 billion equity round to raise capital…
I don’t know how you raise that much cash at such a terrible stock price without completely diluting the hell out of the rest of the shareholders; but onward I say.
Is it me, or does this seem a bit contrived? Stay tuned for The River…
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Sphere: Related ContentThe Fannie Mae and Freddie Mac Poker Game
July 17th, 2008 Categories: Mortgage News, fannie mae, freddie mac
Fannie Mae and Freddie Mac’s recent Wall Street nose dive is an interesting study in how equity market emotionally charged speculative economics have infected the debt sector. The whole string of events that have brought things to where they are today also resembles a poker game, where no one shows their hand until the very end and bluffs are part of the strategy.
If I’m reading the table correctly, Fannie and Freddie’s stock is plummeting because stock holders are staring at the prospect of getting diluted by capital infusions (for a number of reasons) and dumping accordingly. The financial picture behind these two mortgage giants isn’t exactly rosy and a few moving parts (private mortgage insurance companies, sustained ability to provide short term debt) need to hold steady, but both have enough resources available to weather the storm.
A given corporations stock price related to the performance of the underlying business are disjointed at best. Case in point: On April 24, 2002 AOL/Time Warner reported a $54 billion write down, at the time the single largest quarterly loss for a corporation and roughly the equivalent of New Zealands GDP. On April 25, 2002 the stock price rose almost 1%.
Fannie and Freddie’s stock prices may have been trampled, but this isn’t a direct reflection of whats going on inside the companies and/or their ability to sustain through these turbulent times.
Sphere: Related ContentFannie Mae Releases New Mortgage Qualification Guidelines
April 2nd, 2008 Categories: Mortgage News, fannie mae
Flush with new cash to buy up Mortgage Backed Securities, Fannie Mae has released new guidelines when it comes to credit score, LTV and prior foreclosure standards for borrowers. While my presumptive thought was that they would tighten the screws across the board, Fannie is actually expanding approval criteria in certain instances.
As stated, this is a bit of a surprise as I expected a reflexive credit choke out for a consumer trying to get a conforming loan going forward. Instead the guidelines appear to represent a measured increase in pricing adjustment guidelines. In other words, FNMA didn’t yank the carpet out from underneath everyone, they just built in cost in the form of higher pricing to consumers (thus higher yield to investors).
In a nut shell, conforming mortgage programs that deviate from the very straight and narrow (credit scores below 660, LTV’s above 80%, less than ‘full-doc’ income and asset) just got more expensive.
A few other highlights:
Consumers with prior foreclosures will be subjected to higher qualification standards, a five year moratorium will be required to qualify for a conforming loan with a prior property repossession on record instead of four. A 680 credit score and 10% down payment will also be required.
A 60 day mortgage late on a credit bureau anytime over the past 12 months will not qualify for a conforming loan.
Minimum credit scores for 2 unit properties are 640, 680 for 3-4 unit properties.
Max LTV’s were cut on the high end (95%+) anywhere from 3%-5%. There are still 105% LTV programs available.
Expanded Approval products are now to include the following programs:
Manufactured housing (not mobile homes)
Flexible Mortgages with CLTVs up to 100 percent
Mortgage loans with CLTVs up to 105 percent with an eligible Community Seconds mortgage
30-year fixed-rate IO mortgages (10-year IO period only)
5/1 interest-only ARMs with 2/2/5 caps and 10-year IO period (ARM plans 3515 and 3516)
Three- and four-unit properties
Cash-out refinance transactions on two-unit principal residences
Cash-out refinance transactions on second homes
Cash-out refinance transactions on investment properties
Investment properties with LTVs over 80 percent
Consumers, contact your trusted mortgage professional to see what this means for your specific situation.
Professionals, contact your favorite conforming account executive to see what this means for your business.
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Sphere: Related ContentFannie Mae, Freddie Mac agree to new appraisal standards
March 3rd, 2008 Categories: Mortgage News, New Appraisal Standards, fannie mae, freddie mac
Fannie Mae, Freddie Mac agree to new appraisal standards
From the Baltimore Business Journal…
Under the new code, mortgage brokers will be prohibited from selecting appraisers, and lenders will be prohibited from using in-house staff to conduct initial appraisals, among other things.
Lenders will also be prohibited from using appraisal management companies that they own or control.
Too early to determine what the new protocols will be, but will be sure to update as I find out…
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