Golden Slacks to make a profit?? Housing Update: All About Fannie Mae – Delinquency rate explodes, book of business now at $3.242 trillion

Golden Slacks update moved to end of post

Oh shxt! I feel like Butch Cassidy and the Sundance Kid looking at that hockey stick cliff of a chart on FANNIE default rates, can’t we just face the Bolivian Army instead?! Maybe they WILL surrender to us!

FNM SD 10.30

courtesy of Tyler Durden @ ZeroHedge

From DirectorBlue, courtesy of Tyler Durden @ ZeroHedge h/t Instapundit. And the ABSOLUTE LOONS in Congress think extending a homebuyer tax credit is the way to spend money in housing when FAN FRED defaults are rising this way? Good Gawd Almighty. The Tarp Congressional Oversight Panel agrees, the Treasury housing plan IS NOT WORKING.

The [Fannie Mae] “seriously delinquent” rate has gone parabolic, increasing by roughly 5% sequentially and just under 300% YoY [year-over-year]. As mere text will simply not do this metric justice, please enjoy this chart of the dataset from Blytic. It tells you all you need to know about the Fed’s containment of the housing problem

The August seriously delinquent single-family number comprised of a 2.87% non-credit enhanced delinquencies and a very bothersome 11.52%, consisting of credit enhanced loans… The deterioration of FNM’s book however did not stop it from increasing the size of its book [loans]. In September Fannie’s total book of business hit $3.242 trillion, up from $3.229 trillion in August and $3.079 trillion in the prior year…

…This trend should bother you, dear taxpayer, because it is your money on the hook here, which is not only massively mismanaged by Bernanke & Co., LLC, but which sees another $80 billion of free funding every month courtesy of the dollar printing press to onboard even more toxic garbage onto your balance sheet….

We have been covering the housing mess extensively, not least because we are in the middle of it here in Phoenix. We discussed the impending FHA bailout (which they still deny they need) here. Our coverage of the impending second collapse in housing courtesy of UBS’ think tank here. Some highlights:

According to UBS’ data, 2010 will see the projected peak of foreclosures, but look at how spread out the damage is in housing for the next 2 years. I think anyone who expects a huge upturn in time for Congressional midterms is smokin rope, if they can’t unemployment to level off, housing will keep falling and consumers simply will not spend:

“…Analysts based their projections on data from Loan Performance, Intex and the Mortgage Bankers Association’s National Delinquency Survey. They then used a default timing curve to convert the delinquency data into a monthly foreclosure and REO forecast.

Based on their expectation of a 5% liquidation rate, analysts expect total foreclosure inventory to peak in mid-2009 at $450 billion, or 1.83 million loans.  Assuming a 1% liquidation rate, foreclosures won”t peak until 2012, while a 7% liquidation rate will put the peak in early 2009.

Analysts said that the majority of foreclosures will be from subprime. They added their foreclosure outlook for Alt-A is less than 50% of subprime, while foreclosures for option ARMs will occur later than the other sectors and remain strong into 2011 and 2012.

…On the agency side, analysts said data is limited. They expect the foreclosure rate will be less than jumbos, a view supported by the collateral characteristics. Additionally, agencies have lower exposure to California.The firm’s analysis suggested that the peak in agency foreclosures will begin in early- to mid- 2010 and extend into 2011….”

Now comes a real treat! FANNIE is teetering and still EXPANDING its book of loans (it has too since the BIG BANKS which have a TRILLION dollars or so of our money are NOT resecuritizing loans, no one is, that leaves FAN FRED to prop up housing which Timmeh ‘let’s use AIG to funnel CDS payouts to all my Wall St friends’ Geithner and TOTUS have NOT ADDRESSED SUCCESSFULLY) Hillary proposed HOLC in September 2008, had we bought the damned houses from the banks in EXCHANGE for the TARP cash we would not be watching this second collapse unfold now, but TOTUS got LOTS of donor bundling from Credit Suisse (subprime) and UBS, and all their little friends so of course HOLC was off his list of solutions…

*Butch Cassidy-Bob Dylan  courtesy of radiogaga80

housinginyourhands

Update: 11/2: Golden Slacks trying to horn into the low income housing tax credits on FAN to reduce their tax burden? WSJ has it:

Goldman Sachs Group Inc. is in talks to buy millions of dollars of tax credits from government-controlled mortgage giant Fannie Mae, but the potential deal is running into opposition from the U.S. Treasury, which could block the deal.A sale would bring some needed financial respite to Fannie Mae. But the administration is leery about approving a deal that would help Goldman reduce its tax bill, given the animus held by many lawmakers toward big Wall Street firms in general and Goldman in particular…

…Precise details of the deal couldn’t be learned. Some on Wall Street think Goldman could buy $1 billion of the tax credits, which would allow the bank to offset a portion of its profit. It is unclear how much of a discount Goldman is offering to pay. One person familiar with the potential transaction said Goldman could line up other investors for the deal as well..

The Treasury Department has purchased $45.9 billion in preferred stock in Fannie Mae since it took over the company last year to pump money into the firm, giving taxpayers a substantial stake in the firm.

The tax credits are an incentive in federal law to spur investments in low-income housing. The law allows investors to receive tax credits for financing qualified housing developments. These credits tend to be drawn out over periods such as 10 years, and are attractive to companies that know they will be profitable during that span.

Both Fannie Mae and its rival Freddie Mac loaded up on low-income housing tax credits during the real-estate boom. But the credits have lost considerable value in the past 18 months. Fannie Mae has lost tens of billions of dollars and, like many other financial firms, has been unable to use them. Fannie Mae had $5.8 billion in such partnership investments as of June 30….

November 1, 2009. Tags: , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St.

5 Comments

  1. Housing: FINALLY! Some data on the trial mods! Treasury reports more than 27% of homeowners in trial modification are delinquent… « Moderate in the Middle replied:

    […] FHA run out of money. Their book is over 3 TRILLION at FAN alone now and their delinquency rate is EXPLODING. A month after saying they Absolutely Positively did not need a bailout, the FHA is raising […]

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  2. FHA Commissioner on audit results… « Moderate in the Middle replied:

    […] as we sit here and prepare for ANOTHER 50 Billion dollar bailout, this time of ANOTHER government HOUSING […]

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  3. Housing Update: Fannie Mae rolls out ‘Deed for Lease’ program renting foreclosed homes to owners… « Moderate in the Middle replied:

    […] outlook on Fannie default rates here. Our most recent post on the housing forecast and the double dip foreclosure crisis tied to […]

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  4. Janney replied:

    We have nothing to lose anymore. What else could be worse. Thanks for sharing this and good luck on all your endeavors. By the way, I know a real estate coach who could also help many in the real estate industry make money despite the current crisis.

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  5. Unemployment Problems Will Get Much Worse « Economics « What's Happening? replied:

    […] Housing Update: All About Fannie Mae – Delinquency rate explodes … […]

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