Federal Home Loan Mortgage Corporation (QB) (FMCCG) News

Interesting chart…..


WARNING: Housing defaults have skyrocketed

Such a run-up was last seen during the Financial Crisis pic.twitter.com/KcDppiC6Lz— Game of Trades (@GameofTrades_) July 19, 2024

1.3 then up up up. Fnma to 1.4 then 1.85.

Not enough volume to not fill the gap, its normal and needed.

Thanks for the update......:)

Gov final Reply in Lamberth Case ...

+ plus the Seeking Alpha Article below:

https://storage.courtlistener.com/recap/gov.uscourts.dcd.160910/gov.uscourts.dcd.160910.436.0_1.pdf





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Fannie Mae Preferreds: A Safer Choice Than Common

Jul. 17, 2024 1:45 AM ET

...... Summary .......

--- Fannie Mae is likely to be recapitalized in the event of a Donald Trump victory.

--- The value of the common stock would be highly uncertain in a recap, but preferred issues
are likely to be redeemed or converted at face value.

--- The three most liquid preferred have compounded average annual returns above 100%
in the base scenario.



The last few weeks have seen renewed interest in the stocks of Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). The government-sponsored enterprises have been the Schrodinger's cat of the market, alive and dead at the same time, since the mortgage insurers were taken into conservatorship during the 2008 financial crisis.

SA analyst Chris DeMuth Jr. recently highlighted the GSEs as a good way to bet on a Donald Trump election victory because of the likelihood they would be recapitalized and released to private investors--turning the zombie cat into a roaring kitty.

Rather than echo his arguments, I will address the differences between common stock and the various preferred issues, focusing Fannie Mae since I've followed it for at least 25 years.

Common Has Negative Equity

The reason the preferreds carry less risk in the event of a successful recapitalization is found on the balance sheet. The GSEs were prohibited from accumulating equity by the Obama administration. Instead, all profits were subject to a net worth sweep, in which the Treasury Department confiscated profits in return for implicitly guaranteeing the GSEs' debt in case of failure.

As a result, Fannie showed negative common equity of over $130 billion until the Federal Housing Finance Agency reversed the policy under Trump's director, Mark Calabria. While Fannie is now retaining profits, common equity still stands nearly $58 billion underwater.

Balance sheet of Fannie Mae



Preferred equity, which is divided between the government and private investors, shows a positive balance of $139 billion. It is senior to the common. Under any normal reorganization plan, for common shareholders to get anything of value, preferred issues would have to be made whole first, either by being redeemed at par or by being converted to common. (Caveat: Nothing is normal about this situation.)

Calabria, an advocate of recapitalizing and releasing the GSEs, was replaced by the Biden administration, which has not reimposed the net worth sweep but has taken no steps toward release.

Calabria explained his views that the net worth sweep was illegal and release is legally necessary as well as desirable in a June recorded interview with Bloomberg. An especially relevant portion begins around 30:30 of the audio.

When people ask me, you know even in a Trump term, it's not going to be a 2025 exit. 2026, '27 is more likely."

Interviewer: "Do you feel that the 2028 warrants are a meaningful deadline?"

Calabria: "No. (Laughs). The reason it's really not is if you look at the total value pie for Treasury, it's a rounding error. The value really is in the senior preferreds..."

To understand what he's saying, it's important to know the government owns warrants to buy 79.9% of the common stock, which expire Sept. 7, 2028. The government also owns senior preferreds that were issued to support FNMA during and after the financial crisis. Investors own about $35 billion in junior preferreds. These are senior to the government's common warrants and thus cannot be diluted if they are issued, unlike the common stock.

So what Calabria says about the Treasury's shares would also hold true for those held by investors--most of the value is in the preferreds.

Release Scenarios

In 2020, the Congressional Budget Office released an analysis of three release scenarios, with optimistic, median, and pessimistic assumptions.

In some scenarios, the GSEs would raise enough from the common-stock sale to achieve three goals: meeting their capital requirements, redeeming their outstanding senior and junior preferred shares, and providing the Treasury with some value for the warrants it received from the GSEs. (Those warrants give the Treasury the right, though not the obligation, to buy common stock in the GSEs for a nominal price in the future.)

The middle of these scenarios called for redemption of approximately $35 billion in outstanding junior preferreds but ascribed a value of zero to $100 million to the common stock warrants owned by the government, which implies that the investor-owned common shares would be worth less than $20 million.

That's not to discount the possibility of a good return on the common. One possibility is that current shareholders will receive rights to buy new shares, which like many IPO's could be at a favorable price.

Also, if recent profits continue, common equity would turn positive around 2028, and existing shares would have a positive book value. And unlike the preferred, there's no theoretical limit to the value of the common.

However, the preferreds have to be taken care of before any recapitalization can take place, and thus offer a better chance of success. The common stock is more of a bet on a Trump victory and could be risky after the election even if he wins.

Which Preferreds To Buy?

Fannie Mae has 15 issues of preferreds that are trading over the counter, according to Quantum.

Most of them do not trade a lot of shares. By far the most liquid is FNMAS, with average daily volume of 471,000. Others with fair volume are FNMAT (63,000) and FNMFN (65,000).

Let's use FNMAS as an example. It recently closed at $5.55, or 22% of face value of $25. If investors purchased 1,000 shares for $5,550, and it was redeemed for face value in July 2026, they would receive $25,000, for a compound annual growth rate of 112%.

Other issues would give even greater gains, as there is a tradeoff between return and liquidity. FMMAT would have a compound annual growth rate of 127% under the same assumptions. FNMFN is at 147%. Some of the others are still higher, but stocks with low liquidity are not recommended for most investors.

If instead of redeeming the preferreds, the reorganization plan calls for resuming quarterly dividends, the calculations would be different. This does not appear likely, however, as 8.25% fixed coupon on FNMAT and the variable rates on FNMAS and FNMFN represent higher-cost capital than a huge, well-capitalized financial Fannie should need to pay. All of the securities are non-cumulative, so there will be no payment of arrears.

Risks

Re-election of President Biden likely would mean a continuation of the "dead" version of the cat and a tumble in both common and preferred prices. Even if Trump wins, there are various legal and regulatory obstacles to completion of recapitalization. A serious recession that freezes the mortgage or IPO market could make recapitalization untenable before the 2028 election.

Conclusion: FNMA should continue to do well through Election Day as long as there is anticipation of a Trump victory, but its value in a recapitalization plan is speculative. FNMAS, FNMAT, and FNMFN are recommended for investors who can afford to take risks.

This article was written by - Vlae Kershner

Where did that dinosaur hide this time....it's ludicrous for GSE shareholders to still wait for wabbit hunta to do his job.

FMCC

...it's July 17th

L👀KING for Rollin Royce, Elmer Hasenpfeffer to depart from his judges chamber pot 💩

pre-mkt $Boooom ! 200,000 shares FNMAS = $1.12 Million

You will be very well rested.

Mentions Trump, Fannie Freddie👍️👍️👍️
Someone willing to use their one post, please copy paste link on FNMA board.

https://finance.yahoo.com/news/trump-victory-could-ignite-massive-160015120.html

Bid/Ask is settling down along with volume, but would like to see a nice push at EOD, gives confidence to retail.

Golf! Wake up wake up!!! Oh never mind it already happened. Go back to sleep now.😄😄

Can someone wake me when the decimal point has moved 2 to the right and dividends are being paid again?

Thx

These three undervalued stocks have a potential of at least two digits.
https://quotes.freerealtime.com/quotes/Fmcc/Quote

Up .14 and no Boom?!

Elmer Fudd needs chase down the Wiley rabbits involved on this gse theft and prison sentence that should have ended at least a decade ago.

We need John deaton as our lawyer.

WE WANT TO KNOW NOW!! c'mon Elmer Hasenpfeffer!
FMCC/FNMA

*My one poster allowed for today-sheeeeeesh 😵‍💫

$Booom ! Govt goons Fannie/Freddie court deadline for final reply tomorrow ...

👍👍👍

Thanks for the heads up!

TC says he will be out at 8, is he leaving next week???🥲

JUst want to say be careful with your investing money next week folks! Those manipulating this stock will for sure use this Trump even to push up price (to maybe highest we've seen) then pull the bottom out once again a week or two or three later via little and large bleeds in price.

$132 billion in cap reserves making 5 plus billion a quarter for both gse’s and OTC

Penny land

There is no corruption going on here

Lmao

$Boooom ! - Agency Business Increases in Second Quarter

jbancroft@imfpubs.com

A slight decline in mortgage rates and a seasonal warming trend in housing sales
helped lead to an uptick in issuance of agency mortgage-backed securities in the
second quarter of 2024.

Fannie Mae, Freddie Mac & Ginnie Mae issued a combined $272.04 Billion of

single-family mortgage-backed securities in the second quarter,

a solid 27.4% gain from the prior period, according to a new ranking

& analysis by Inside Mortgage Finance.

For a change, Fannie and Freddie posted a bigger gain than Ginnie. The two
government-sponsored enterprises recorded a combined 33.1% increase in
single-family business. Ginnie was still the leader of the three with $104.65 billion
in second-quarter volume, an increase of 19.2% from the prior period.

United Wholesale Mortgage widened its lead as the top producer of single-family
agency MBS with a 35.3% increase in quarterly production. Most of that came
from the GSE market.

Wow! This didn’t age well. Hahahahasnork

There are a couple DJT and JB Haters on the Board. One guy would post 10 negative posts on DJT and claim his memory is gone to justify his positions. Politics in relationship to the GSEs is fine but politics just to espouse how much you hate a candidate does nothing to share useful info.

there is no momo in GSEs, who would trade it, only someone who does not have a clue about the overall market, and thus should trade nothing. its in or out with GSEs, u either believe the P fantasy group, or you believe in justice and constitution, along with supporting cases.

...There was a couple of logical posts from someone who seemed very resourceful. Then "magically" disappeared. Probably it was the "non yellow journalism" was poised as a threat.

Pick and choose who's allowed on the twins board. No different than the cliques from high school. 🙈🙉🙊

Politicians took FnF like North Korea took Otto Frederick Warmbier.

Liars ban discussion of who to blame.

Who is the liar except he who denies Jesus is the Christ. He is the antichrist that denies the Father and the Son. It's in the book all President planted their hand upon and take an oath.

Liars steal....kill....

Politicians lie and steal and kill...

Just the facts ma'am.

Yeup. I’m down to only one post also.

It’s not about the political posts

It’s about us calling out what is really happening and getting silenced

Calling out calabria is what I did

Calling out Lame breath as well

This is not political

It’s real facts about gse’s being held in prison

Site sucks almost as bad as Twitter censoring shit after being bought and paid for! Dorsey was paid millions to discredit the laptop !

LOL, everyone on the FNMA board pretty much getting dingged to one post! One post is a short distance from being banned. Whoever the last guy is with one post, and is not completely banned, please turn out the lights and leave your last message as a favor to others, to go to the non-moderated board. It's unbelievable and makes zero sense that the FNMA and FMCC board are taboo politically. JMHO

Another Corrupt Bank Busted, gosh damn between Wells and 5/3rd. My lord!

https://www.complianceweek.com/regulatory-enforcement/cfpb-orders-fifth-third-bank-to-pay-20m-over-fake-accounts-forced-auto-coverage/35071.article#:~:text=Ohio%2Dbased%20Fifth%20Third%20Bank,and%20wrongfully%20repossessing%20customers'%20vehicles.

Boom, rockets, buy the dip! Nothing here people !

It just gave weak minded shareholders a way out. The PFreaksKTCarneyCircus has scared many off. In reality we are just as far from 10c as they are from par. Receivership and greedy P BS for years in courts and in talk, failed, but has scared off many.

price in the red, new all time record, when positive insider trading makes stock go down. NEXT.

Insiders don't have to report holdings while on OTC. They do on real exchanges… WoW !!!$$$$$

Wow 2,189 shares owned by interim CFOs Wife ? 5 posts all caps ? really ?



75,000 Freddie Block Buy ...

THIS IS LIKE THE FIRST TIME EVER ANY INSIDER HAS NUTTED UP AND REPORTED COMMON STOCK HOLDINGS!

HELL YEAH!!!

LET’S GO GREEN MACHINE !!!! $$$$$$$$$$$$$$$$$$$$

FNMA & FMCC

First Time Ever An Insider Reports Holding Common Stock!!!! Ka BooM! Ka POW! Ka-CHing!!! $$$!!!

BooM !!! INSIDER HOLDS COMMON

http://archive.fast-edgar.com/20240708/A82GA222ZZ22B23222ZW224262QRZK22V26G/

NEW SEC FILING!!!! INSIDER REPORTS OWNERSHIP OF COMMON STOCK FMCC ! BooM !!!!

There is a new post on Howard on Mortgage Finance, titled “The MBS Vigilantes.” In this post Tim addresses the argument that Fannie and Freddie should not be released from conservatorship without an explicit government guaranty on their securities, which may be contributing to the prolonged status quo for the companies. The post can be found here: howardonmortgagefinance.com

Funny I was just looking at these this morning. I was surprised to see Freddie’s retained mortgage portfolio is bigger than Fannies. Freddie got 86.5B and Fannie has 75.7B. This is definitely part of why Freddie’s earnings should grow faster between that their business growing at a higher annual clip than Fannie. Freddie’s market cap is still about half that of Fannie which could mean opportunity for Freddie’s share price to jump rapidly if adding business like their 2nd home loans is successful.

GSE net worth totals from SEC 10Q reports
FNMA 82.0 Billion + FMCC 50.0 Billion = $132.0 Billion pic.twitter.com/DYYCV0Pcwp— Cmdr Ron Luhmann (@usnavycmdr) July 8, 2024

GSE net worth totals from SEC 10Q reports

FNMA 82.0 Billion + FMCC 50.0 Billion = $132.0 Billion

Can someone remind me

How many billions in capital
Fnma
Fmcc

Have now?

Also earnings coming for 2nd quarter that will add another 5 plus billion to the totals

Go FnF

Time for November rally to start

Treasury does NOT do anything unless specifically directed by their current administration heads !!

Link doesn’t work