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most of Fannie Mae liabilities are bonds owed to the federal goverment. It will not go down unless the feds default it. All the feds have to do to keep it up is restructure the debt it owes the governemnt.
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Gaius Mucius Scaevola Sinistra
Japher: "crap, did I just post in this thread?"
"Bloody hell, Lefty.....number one in my list of persons I have no intention of annoying, ever." Bugs ****ing Bunny
From a 6th grader who readily adpated to internet culture: "Pay attention now, because your opinions suck" -
Re: So If Fannie Mae Goes Under. . .
... it will snow in hell.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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But.. it snows in Hell all the time. In the dedicated gardeners' section.Comment
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Re: Re: So If Fannie Mae Goes Under. . .
Kid is unfamiliar with Dante's 8th circle............Originally posted by Kidicious
... it will snow in hell.“It is no use trying to 'see through' first principles. If you see through everything, then everything is transparent. But a wholly transparent world is an invisible world. To 'see through' all things is the same as not to see.”
― C.S. Lewis, The Abolition of ManComment
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It'll be interesting to watch the stock markets later this morning ..."I may not agree with what you have to say, but I'll die defending your right to say it." — Voltaire
"Wheresoever you go, go with all your heart." — ConfuciusComment
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Here's the lede from the WSJ...
PAGE ONE
Treasury and Fed Pledge Aid
For Ailing Mortgage Giants
By JAMES R. HAGERTY, DEBORAH SOLOMON and SUDEEP REDDY
July 14, 2008; Page A1
The U.S. Treasury and Federal Reserve, capping a weekend of high-stakes maneuvering, attempted to shore up confidence in Fannie Mae and Freddie Mac by announcing a plan that placed the federal government firmly behind the battered mortgage giants.
In a statement timed to precede the opening of Asian markets Monday, as well as a closely watched auction of debt by Freddie, the Treasury said it plans to seek approval from Congress for a temporary increase in a longstanding Treasury line of credit for the two companies.
[chart]
The Treasury also said it would seek temporary authority so that it could buy equity in either company "if needed" to ensure they have "sufficient capital to continue to serve their mission" of providing a steady flow of money into home mortgages. The plan, which requires congressional approval, also calls for a provision to give the Federal Reserve a "consultative role" in the process of setting capital requirements and other "prudential standards" for Fannie and Freddie.
The Fed's Board of Governors met Sunday in Washington and voted to grant the New York Fed authority to lend to Fannie and Freddie "should such lending prove necessary," the central bank said in a statement. The move would effectively give the two companies access to the Fed's discount window if necessary, providing a backstop in case the firms were to face a short-term funding crisis down the road.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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In any event, it seems likely that Fannie and Freddie will curtail somewhat their buying and guaranteeing of mortgages, one way or another -- by raising prices or having stricter lending standards.
This would be very bad for the housing market.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Fannie just completed a major overhaul of its desktop underwiter automated approval software to fix a lot of the stupid approvals it was giving. Just a couple of the new changes include...no FICO scores under 580 and no more approvals at 80% debt ratios just because you have a big balance in your 401K.Originally posted by DanS
In any event, it seems likely that Fannie and Freddie will curtail somewhat their buying and guaranteeing of mortgages, one way or another -- by raising prices or having stricter lending standards.
This would be very bad for the housing market.
It is a tightening in their standards, but most of it is pretty common sense that you wonder why it wasn't done before."I am sick and tired of people who say that if you debate and you disagree with this administration somehow you're not patriotic. We should stand up and say we are Americans and we have a right to debate and disagree with any administration." - Hillary Clinton, 2003Comment
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Wow, they counted the balance in your 401(k) even though it is shielded in a bankruptcy proceeding?
It seems like even if we're getting back to sane approvals, that will contract the market and end up lowering prices.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Indeed.It is a tightening in their standards, but most of it is pretty common sense that you wonder why it wasn't done before.
Makes me wonder if it's a lack of proper regulation/oversight.
-Arriangrog want tank...Grog Want Tank... GROG WANT TANK!
The trick isn't to break some eggs to make an omelette, it's convincing the eggs to break themselves in order to aspire to omelettehood.Comment
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Rather, I would say it's a management failure. I see no reason not to blame those directly responsible.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I have no problem blaming them. I simply wonder whether their failures are in any way unique or unexpected, and whether they might have been prevented or mitigated with better oversight.
I honestly don't know. I wonder.
-Arriangrog want tank...Grog Want Tank... GROG WANT TANK!
The trick isn't to break some eggs to make an omelette, it's convincing the eggs to break themselves in order to aspire to omelettehood.Comment
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Fannie Mae, Sallie Mae, and Freddie Mac going down?
Sounds like a strange pr0n featuring old people.B♭3Comment
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Fannie has always been known as asset friendly. They have relied on a borrower's ability to liquidate assets in order to meet obligations. As DanS pointed out, this has some serious loopholes for a distressed borrower. Fannie's new Dektop Underwriter 7.0 addresses some of those issues, but Fannie is still pretty asset friendly. Setting a minimum score of 580 is also a pretty smart move. While there are a lot of good loans below that score, they should not be part of what is considered a "prime" portfolio.
The Fed today just released a copy of their proposed rules for subprime lending. This has been much anticipated by both consumer advocates and lenders. I am waiting on my copy to review it, but some of the things I believe it contains are more clear disclosures and a ban on pre payment penalties...Both of which are good things for borrowers."I am sick and tired of people who say that if you debate and you disagree with this administration somehow you're not patriotic. We should stand up and say we are Americans and we have a right to debate and disagree with any administration." - Hillary Clinton, 2003Comment
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Originally posted by Mrs Snuggles
Fannie Mae, Sallie Mae, and Freddie Mac going down?
Sounds like a strange pr0n featuring old people.
You are closer to right than you think imho!
"I am sick and tired of people who say that if you debate and you disagree with this administration somehow you're not patriotic. We should stand up and say we are Americans and we have a right to debate and disagree with any administration." - Hillary Clinton, 2003Comment
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