Fannie’s turn: loses *another* $13b in Q1 asks for *another* $8.5b from Treasury, has now lost $136.8B and taken $75b in aid…
Update: here is that quote, it is courtesy of Calculated Risk:
…Greg Morcroft at MarketWatch reports:
Fannie sees no profits for the “indefinite future” … financial sustainability uncertain….
They aren’t even TRYING to make it look good anymore…one highlight in the WSJ said they do not see any chance of being profitable in the near term, pfft, Should’ve done the damn HOLC.
…the mortgage-finance company operating under federal conservatorship, said it will seek $8.4 billion in aid from the U.S. Treasury Department after reporting its 11th-straight quarterly loss.
The company said it had an $11.5 billion first-quarter loss in a filing today with the Securities and Exchange Commission. Washington-based Fannie Mae had posted $136.8 billion in losses over the previous 10 quarters and taken more than $75 billion in U.S. aid since April 2009….
Housing: Team Obama plans to ‘poll’ Americans to see what we want to do with Fannie, Freddie? Where is the leadership?! plus Ben Bernanke testifies before JEC…
Update: Ahh HousingWire says they are taking responses to their poll via the Register first. Team Obama’s answer for everything is a meeting, a poll, a panel, typical faculty lounge stuff, lol
The administration said it will first seek public response via the Federal Register listed at regulations.gov. The administration will then hold a series of public forums on housing finance reform.
Update: HousingWire has the details on the ‘poll’ Team Obama plans to take, what a disgrace! Should have and still should just do HOLC, but then Credit Suisse and UBS might take a loss, Gawd Forbid, but it is fine if taxpayers shoulder it, I call shenanigans….
The Obama Administration today puts the public behind the mic on the reform of the US housing finance system, including Fannie Mae and Freddie Mac. A list of questions published today targets the opinions of mortgage market participants, industry groups, academic experts and consumer and community organizations, according to an e-mailed statement from the US Treasury Department.
Here is the Treasury Press Release:, they do not list where to send your input, lol, but here is their contact info:
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
General Information: (202) 622-2000
Fax: (202) 622-6415
7:23: Shaun Donovan (HUD Sectry) says he does NOT believe the stress on housing affordability fueled the crisis and that it was vagueness in the programs that was a problem. Oh boy.
Ed Royce R-CA is disputing this and citing Geithner’s previous testimony that the GSEs used the affordability mandates to buy bad loans…well yeah!
Okay we’re 20 mins in and it’s a smack down, you must watch this hearing!
now Mel Watt D-NC is talking up low income rental housing and the GSE roles in that. This is one of Barney Frank’s pet plans. I have long said they will take these foreclosed homes and convert them to Section 8 after families lose them. Unreal.
7:20 am AZ time: Watch the hearing live now here
ZOMG!! BUY A FRAKKIN CLUE TEAM OBAMA!!!! Lordy, Lordy..I thought these guys were SOOPER GENIUSES who had a plan before he even took office!
Now we have an uncapped FAN FRED FHA debt growing exponentially and they want to take a frakkin poll? Are you frakkin kidding me?!
The hearing with the House Financial Services Cmte has begun and Spencer Baucus R has nailed the issue-
Ranking Member Spencer Bachus gives opening remarks at a Financial Services hearing on the future of housing finance, where the Obama Administration failed to provide a plan for reforming Fannie and Freddie.
If that hearing doesn’t terrify you, see Ben Bernanke live here before the Joint Economic Cmte suddenly acknowledging we have a serious fiscal crisis and need immediate action, funny he didn’t say that before they rammed down the Obamacare bill huh? frakker.
HOUSING UPDATE – Financial Services Cmte asking for your experiences with JPMorgan Chase ahead of hearing tomorrow…
Update: There is another hearing tomorrow, see today’s hearing here:
April 13th from prepared testimony reads more like a PR show by the banks.
April 14th will be the regulators the National Law Center and those pro HAMP vs The Bankers Assoc and others
Both will be broadcast live
Barriers to Principal Reduction
April 13: House Financial Services Committee
The Recently Announced Revisions to HAMP
April 14: House Financial Services Committee
RE: Congressional Hearing in Washington DC, Tuesday 4/13/10, 10am with the Financial Committee.
Okay peeps, if you have a HAMP experience you would like to relate to the House Fin Svcs Cmte ahead of the hearing tomorrow on HAMP and servicers please contact as follows with your experience:
Just had a phone call from Brendan Woodbury – who is also handling tomorrow’s House Financial Services Committee hearing
He said for me to asap FAX over all I have – I asked him if it would be ok to have others do the same – he said by all means.
FAX ASAP what you have gone through to
Congressman Barney Frank
MARK URGENT – PERTAINS TO FINANCIAL MEETING 4/13/10
FAX to (202) 225-0182
The head of mortgage lending for JP Morgan Chase David Lowman entered testimony suggesting a Quick turn around and assistance for any homeowner trying to stay in their home.
More info here including David Lowman’s prepared testimony (click on the link to his name).
House Financial Services Committee
Any HAMP applicant, after either introducing you to their friend..RALPH!, or laughing deliriously in response, will happily hand over evidence of, in most cases, 15+ months of fruitless attempts to work with the servicers on HAMP.
HAMP is all voluntary. HAMP to date, is extend and pretend to keep homes off the market until the deluded banks think prices will come back. Forecasts suggest 15 YEARS before prices are back in sand states.
In written testimony prepared for a hearing in Washington Tuesday of the House Financial Services Committee, some of the nation’s top mortgage lenders warned of the risks of relying heavily on forgiving principal as a means of averting foreclosures and argued for concentrating mainly on other methods, such as reducing interest rates….
These banks forget TARP, its entire purpose as written was to buy bad home loans and relieve the foreclosure crisis that led to the financial collapse. Instead they got a free ride, FED continues to give them free money, they have rates so low savers are punished, they continue to devalue our dollar so we have less purchasing power, and they won’t fix the damn housing issue which is back with a vengeance.
If they will not work out the loans to resolve the issue, then the House needs to go ahead and do the cram down bill instead, which we have been opposed to until now. The banks need to share the economic pain they brought upon us all.
If we had LET THEM FAIL, they would’ve done write downs themselves to keep afloat. Our interference with TARP let them avoid the principal writedowns to begin with.
One more time – FAN FRED FHA back all these loans anyway, the TAXPAYERS are ALREADY on the hook. Not working through mods quickly with writedowns means walkaways continue apace. They are accelerating and the recent FAN home attitudes survey showed fully 15% of those surveyed agreed it was ok to walk away if facing financial difficulty making payments.
…When asked if financial distress makes stopping payments on an underwater mortgage acceptable, 15 percent of respondents said yes in Fannie Mae’s National Housing Survey, a remarkable level of public acceptance for homeowners who walk away from their mortgages in light of the growing number of defaults in Fannie Mae’s portfolio.
Both delinquent mortgage borrowers and those current on their mortgage payments are more than twice as likely to have seriously considered stopping their payments if they know someone who has already defaulted, according to the survey released today.
Underwater borrowers were more than twice as likely to be behind on their mortgage payments and were more than twice as likely to believe stopping payments was acceptable than borrowers who were not underwater. Only 33 percent of respondents cited their moral qualms as a factor motivating them to pay their mortgage…
Even conservatives are FINALLY accepting HOLC (HomeOwnersLoanCorporation like in Depression)- CATO INSTITUTE!
…The omission of recourse has been a major flaw of the Obama loan modification plans. If the taxpayer is putting something on the table, then borrowers should be expected to do the same. During the Great Depression, FDR recognized as much.
The primary New Deal vehicle for addressing foreclosures was the Home Owners Loan Corporation. The HOLC required recourse and practiced it. In fact, approximately a third of HOLC revenues were from deficiency judgments against delinquent borrowers, including wage garnishment. Perhaps there are some parallels to today, as the HOLC found the second most common reason for foreclosure to be “obstinate refusal to pay.”
FDR recognized that many delinquent borrowers could afford neither their mortgage nor a deficiency judgment; we must recognize the same today. Recourse is not a cure to stop every foreclosure. It is, however, a proven method for reducing some foreclosures…
and now admit it would have been better in 08. Gee who said that? Hillary that’s wh0.
…First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.I’ve proposed a new Home Owners’ Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We’ve got to stem the tide of failing mortgages and give the markets time to recover.
Jeebus it took long enough! I remember when my Congress Critter’s staff LAUGHED at me when I suggested just this: that in the 4 states underwater the most they propose a program to help us here (I even used the 20% figure, it is also all over this blog in posts for the past year). And here is just such a program…finally. Let’s hope it can help some people and doesnt get gobbled up by any ACORN like entities..
Millions of homeowners are hanging by a moment like Lifehouse says…
President Barack Obama is expected to announce plans Friday to provide an additional $1.5 billion to a state-assistance program for homeowners worst hit by the downturn in U.S. housing values.
The program, which Mr. Obama will announce in Las Vegas, is for states where the average home value for all homeowners in the state has dropped more than 20% from its value at the height of the housing bubble. Under the formula, five states have home-price declines steep enough to qualify them: Nevada; California; Arizona; Michigan; and Florida…
...The money would be distributed by state and local housing finance agencies, or HFAs, in each state. The $1.5 billion would be allocated according to a formula based on home-price declines and unemployment.
HFAs could use the money in a variety of ways, including unemployed homeowner assistance, mortgage workouts or new home purchase assistance. But the Treasury Department, which would bankroll the program with unused money from the Troubled Asset Relief Program, must approve a state’s plans.
More from Politico:
…The program Obama will announce is intended to help address “urgent problems,” with the specific goal of helping people who are sitting in houses that are worth less than is owed on them, the first senior administration official said.
The five states that are eligible for the funds have all seen a more than 20 percent decline in housing prices, the official said. The official also said the money will not be divided equally among the states but rather allocated based on the state’s price decline and unemployment rate.
And unlike $23 billion that the Federal Reserve recently provided to state housing authorities, states receiving this money are not expected to pay it back, the official said.
Update 3: 12:13pm: Angelides asking Blankfein what his responsibility was to the investor on those loans they securitized and sold, Blankfein is claiming they were sophisticated investors who sought that exposure. Basically, they deserved it? I dunno. Angelidies got an Agatha Christie analogy in, I always love those. He said maybe it is like Murder on the Orient Express and everyone did it, but still, how much responsibility is yours ….was your due diligence adequate? Blankfein trying to wiggle around it….good luck Lloyd…under oath, liability lawyers hanging on their chairs now….Phil says GS was doing more, they were also facilitating the market in which the products existed, Lloyd agrees to that extent they made that market…
Update 2: 10:07am: Phil Angelides questioning of Lloyd Blankfein was great. Lloyd keeps saying as a ;market-maker’ it is perfectly fine for GS to sell MBS derivatives to clients while simultaneously closing GS OWN position in those assets due to risk..Phil doesnt buy it.
BILL THOMAS! Vice Chair of the Commission just offered the American people his email if they want to submit a question to any of these CEOS!! Well I do!
email@example.com or some derivative thereof…send in your questions!
I really liked Moynihan’s opening statement, he is grateful to the American people, Blankfein needs to eat some of the humble pie Brian had before he arrived. (FD-MiM are BofA shareholders and are keenly interested in how Brian does today, his first big appearance since taking reins as BofA CEO)
Update 1: 9:07 am EST: WOW!! They put them under oath!! first time I have seen these bank CEOs be put under oath (except Ken Lewis on the BofA Merrill witchtrials)
CNBC should carry a livestream of the testimony here when it begins later today NOW LIVE (9:00 am EST, just began opening statements)
James Lockhart (Dubyahs head of FHFA) of all people calls for principal reductions on CNBC this morning and Barney Frank D-MA said it will not happen..Through the Looking Glass…
James Lockhart, former head of the Federal Housing Agency, told CNBC Tuesday that he wants more generous mortgage modifications, including principal payment reductions.
…Although the latest Case-Shiller Index indicates the housing market has been improving for the last five months, there could be another spike in foreclosures, said Lockhart. While banks and investors have already marked down mortgages on their books, he said, that benefit has not yet been passed onto homeowners….
…“We still haven’t seen the falloff in foreclosures,” he said. “All the solutions have been on the income-side, and people’s balance sheets are suffering. It’s coming to the point where I think we really have to consider much more aggressive [loan modifications and] at looking at reducing principals.”
Lockhart also expects strategic defaults will start to occur more frequently. “You look at the bankruptcy numbers; the stigma is not there anymore,” he said….
Rep. Kucinich D-OH has called for an investigation into what looks to everyone like a backdoor TARP...
…Representative Dennis Kucinich, an Ohio Democrat who was an early opponent of Obama in the 2008 presidential race, thinks the move is backdoor way to help banks, and a congressional subcommittee he leads is investigating the Treasury’s decision to cover unlimited losses at the housing finance companies.
“This new authority must be used responsibly and for the benefit of American families,” Kucinich said. It “cannot be used simply to purchase toxic assets at inflated prices, thus transferring the losses to the U. S. taxpayers and acting as a backdoor TARP.”
That’s exactly what Treasury is doing, says Dean Baker, co-director of the Center for Economic Policy Research in Washington. “This looks like the original TARP,” Baker said, referring to $700 billion financial rescue fund, known officially as the Troubled Asset Relief Program.
Waxman and Issa also ‘concerned’
…Kucinich is not the only one on Capitol Hill up in arms. House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat, said he doesn’t like the idea of a “blank check” for Fannie and Freddie.
And Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, called it “a continuation of the bailout policies that have mortgaged away the future solvency of our country.”…