Housing: Freddie loses *another* $6.7B in Q1, asks Treasury for another 10.6B…

unbeLIEVable.

Our previous posts on FAN FRED HAMP and the EPIC FAILURE of Team Obama to address housing here. HOLC dammit. The housing double dip is right on track.

HousingWire:

Freddie Mac reported a $6.7bn Q110 net loss, widened from $6.5bn in the previous quarter.

The Federal Housing Finance Agency (FHFA), acting as Freddie’s conservator, requested $10.6bn in aid from the Treasury Department to cover the company’s $10.5bn net worth deficit. At the end of 2009, the company had a $4.4bn net worth…

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May 5, 2010. Tags: , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics. Comments off.

Judd Gregg schools Peter Orszag, Rep Paul Ryan explains the Obama Budget

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February 3, 2010. Tags: , , , , , , , , , . Economy, Finance, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Meredith Whitney & Jamie Dimon on principal forbearance in the JPMorgan Chase earnings call PLUS Are JPMC, BofA, Citi taking kickbacks for second liens on short sales?! & HAMP/MHA assisted a whopping 7% of those eligible last year..

Update:  Short Sale Kickback video added

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In other great news, Diana Olick is breaking a HUGE story now on CNBC that the big servicers, JPMorgan Chase, Bank of America and Citi have demanded off-HUD, off ClosingStmt payments to release second liens they hold in short sales (against RESPA law).

Treasury told Diana they were unaware of this and will look into it. Good grief. and they wonder why the servicers dont want to do mods? THEY ARE GETTING KICKBACKS ON SHORT SALES! Plus they get an INCENTIVE PAYMENT to do short sales from Treasury (we the taxpayers) now. My Lord this is unreal.

Again this is the fault of the WH and Treasury.  Treasury actually RAISED the cap on the ‘incentive fees’ the servicers can earn by doing their damn job as servicers today to 35 billion. Banks will do exactly what they can and no more. Sheila Bair at FDIC is the only one moving on principal forbearance, as usual she is ahead of the curve.

Plus the AP isn’t buying the BS spin anymore in its reporting of the much vaunted numbers Treasury is spinning today on their newly permanent mods (which they told the servicers to waive documentation for to achieve, the only thing the trial mods can be disqualified for now is ‘property’ disqualification, nice eh?):

The Obama administration’s mortgage relief plan provided help to only 7 percent of borrowers who signed up last year, another black mark for the struggling program.

Ouch that’ll leave a mark.

About 900,000 borrowers have enrolled in the $75 billion program since it launched in March, the Treasury Department said Friday. But as of last month, only about 66,500 homeowners had received permanent relief. Another 46,000 have been approved and should be finalized soon.The plan aims to make borrowers’ mortgages more affordable by reducing the mortgage interest rate to as low as 2 percent. They receive temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete necessary paperwork, including proof of income and a letter explaining the reason for their financial hardship.

The Treasury Department is pressing the 102 mortgage companies that are participating in the program to do a better job….

This is a great back and forth. I think we can confirm Treasury is doing exactly JACK SHXT about meaningful mods after hearing this discussion, so much for Obama being tough on those fat cats:

CalculatedRisk:

Here is an exchange between Meredith Whitney and Jamie Dimon on the JPMorgan conference call this morning (ht Brian):

Whitney: [W]e’re reaching a critical point in terms of all of the loan modification efforts and this is an industry question but then how it specifically affects your Company, given the fact that the industry feedback and statistics on the loan modification efforts are not good, so you question what’s the next initiative and the issue of principal forbearance. How much momentum do you think that has, can you comment on what stage we are in terms of obviously the extension ends [soon] with the last slug is over in February, so where do you think we are in terms of the government’s efforts to influence banks to do certain things?

Dimon: Well remember we do modifications of our own and we do the government modifications and I do think they’re kind of new, it was complex, and I think people will get better at it over time, Meredith. We have not thought of a better way to do it than loan by loan, which is does the person want to live there, can they afford to live there, and we really think that the payment, how much you’re paying is more important than principal. Even if you are going to do something on principal, to do it right you have to do it loan by loan and it effectively comes a similar kind of thing. The difficulty is the loan by loan part and we’ve asked the government and I think they tried to streamline a little bit to have programs because there’s too much paperwork involved in it so a lot of the reasons we’re not getting to final modifications half the time we don’t finish the paperwork, so they need the lower payments but they weren’t finishing the paperwork so we’re trying to get better at it, honestly, we rack our brains to figure out if there’s a better way to do it and you can do it more macro than loan by loan but once you start talking about macro, you’re going to get involved in a lot of issues about whether the people live there, whether they have the ability to pay, whether they were honest when they first told people how much their incomes were, so we’re working through it.

Whitney: Okay, do you get a sense that there’s something right behind HAMP, that there’s another solution for the government or is it more your efforts?

Dimon: We’re trying to do this, look, we’re trying to have ideas and they are trying to have ideas but if we had a brilliant one we would be very supportive of doing it. We want to do the right thing for the people.

Whitney: Okay, so a point of clarification on your answer, issue of principal forbearance is not something that people should be overly concerned about with respect to reserves and capital for the bank?

Dimon: No, I think if there’s a macro government force on something like that you could have a fairly significant effect on loan loss reserves and losses, etc.

Whitney: But is that a real, any momentum?

Dimon: Honestly Meredith you probably know as well as we do.

Whitney: I don’t know. I can’t help myself on that one.

Neither can we!

January 15, 2010. Tags: , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Jamie Dimon fights back against UK Banker Bonus Tax

Jamie was one of our picks for Treasury Secretary to replace the tax challenged Timmeh (see our March post). Plus since we are shoveling money into,  and making all our policy based on,  protecting the banks, why not have someone with actual private sector banking experience?! Plus Jamie is actually, you know, SUCCESSFUL!

Jamie talks reality to Alistair Darling. JPMChase is about to enter a ginormous HQ on Canary Wharf in London. Maybe the ingenius Banker Bonus Tax that Gordon Brown and Alistair Darling have floated is NOT the best way to keep London as the European center of trading….

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December 30, 2009. Tags: , , , , , , . Finance, Politics, Wall St. Comments off.

CNBC Call of the Wild: Fannie/Freddie Bailout Debate

Airtime Mon. Dec. 28 2009 – 9:46 AM ET Treasury says it will provide capital on an as-needed basis to Fannie Mae and Freddie Mac over the next three years. Shari Olefson, of Fowler White Boggs, and Spencer Rascoff, of Zillow.com, share their insight.

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December 28, 2009. Tags: , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St. Comments off.

Market Movers Monday: Treasury gives FAN/FRED ticket to ride, China will not revalue yuan

When last we visited with FAN/FRED they were facing skyrocketing default rates and had exponentially increased their book, they and FHA being the last purchasers of MBS loans standing (aside from the Federal Reserve which will stop its MBS purchases in March).

…Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about $5.5 trillion of the $11.8 trillion in U.S. residential mortgage debt. They have financed as much as 75 percent of new U.S. mortgages this year.

They have been run for more than 40 years as shareholder- owned companies that also have a federally chartered mission to promote the housing market. Those dual mandates have collided and contributed to the companies’ failure, said Federal Deposit Insurance Corp. Chairman Sheila Bair.

“Go one way or the other,” Bair said in an interview this month. “Either completely privatize them and get them completely out or run them as public utilities.” The hybrid structure, with private shareholders, public mandates and federal backstopping, “is classic too big to fail.”…

FAN/FRED/FHA are now the owners of all these loans. But they are not modifying them. The default rates are rising with unemployment. So what did Team Obama do? Did they talk to FAN FRED FHA about doing meaningful mods to keep families in their homes?

Of course not! They lifted the cap off the lines of credit these GSE’s have with Treasury. Did they raise it to the requested 400 Billion a piece?

Of course not! That would be CRAZY!

They eliminated the cap completely instead!!!, giving these monstrous entities an UNLIMITED LINE OF TAXPAYER FUNDS FOR THE NEXT 3 YEARS.

Gee what else lasts the next 3 years? Oh yeah the Obama Presidency.

UnbeLIEVable.

…The Treasury on Dec. 24 said it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the $400 billion lifeline for Fannie Mae and Freddie Mac could lapse or be exhausted. The companies, the largest source of money for U.S. home loans, were seized by the government in September 2008 as their losses threatened to further disrupt the housing market.

The Treasury also relaxed its timeline for Fannie Mae and Freddie Mac to shrink their portfolio of retained mortgages. Previously, the companies were instructed to shrink their portfolios at a rate of 10 percent a year. Now, they will be required to keep their portfolios below a maximum limit, currently $900 billion, that will fall by 10 percent a year.

Washington-based Fannie Mae, which has lost $120.5 billion over the past nine quarters, has requested $60.9 billion from the Treasury this year. McLean, Virginia-based Freddie Mac has tapped $50.7 billion in government capital since November 2008 and recorded $67.9 billion in losses over nine quarters….

In other news, Obama’s ‘tough talk’ with China in Asia and Copenhagen really had an impact. NOT! Wen Jiabao made it clear China will NOT revalue the yuan to save Asia from the collapsing US Dollar. These guys are playing chicken with the global economy. I am confident China, which HAS to grow to maintain its grip on the billions of people it governs, will stick to its guns and Timmeh Geithner and Obama will bow to the reality. As HRC said during the primaries you do not argue with your banker, and Obama has ensured with his out of control spending that China will be our banker for the foreseeable future.

Prime Minister Wen Jiabao of China struck a defiant note yesterday about the country’s exchange rate policy, saying the government would not give in to foreign demands that it let the yuan rise in value.Wen said in an interview with Xinhua, the official Chinese news agency, that the currency was facing growing pressure to appreciate, but he insisted that China was committed to keeping it stable, having virtually pegged it to the dollar since the global financial crisis worsened in the middle of last year.

“We will not yield to any pressure of any form forcing us to appreciate,” he said. “As I have told my foreign friends, on one hand, you are asking for the yuan to appreciate, and on the other hand, you are taking all kinds of protectionist measures.”

The true purpose of these calls is to contain China’s development, the prime minister said.

The yuan has fallen against the currencies of most of China’s trading partners this year because it has been fixed to the weakening dollar, while China’s economy has bounced back strongly….

December 28, 2009. Tags: , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Wall St. 4 comments.

Fannie Mae is back and they want 400 billion….

UPDATE: WSJ provides an interactive map of ‘strategic defaults’  here

A-HA!!!! I FRAKKING KNEW IT!!! $%^y&*u(*(&^%&$&^!!!!! Frakkiing Fannie and Freddie will NOT MODIFY frakking loans but they want BILLIONS MORE!!! ARRRRRGLEEE!!!!! Our previous rants on this here. People are not talking about this much and this is THE NUMBER ONE OBAMA FAILURE – HOUSING.

As we have said over and over and over –   DO THE DAMN HOLC ALREADY!! We are bailing out the losses on the short sales and these homes are being bought by investors who are making another damned housing bubble!!! (and the big bank servicers get a hefty fee) Just write down principal for the 4 states sooo far underwater and keep the homeowners in, this way we take the loss ONCE and have saved a family. Jeebus it is not that hard.

If anyone doubts the cycle of DOOM this lack of action is creating, see WSJ front page again today a piece about peeps here in AZ walking away – ‘strategic default’.  It is getting less and less ‘stigmatic’ lol, to walk away. It is a cycle of DOOM that will drag the economy back down to its damn knees if they do not take MEANINGFUL action. And this move by FAN FRED to get HUNDREDS OF BILLIONS MORE IN TAXPAYERS BAILOUTS PROVES MY DAMN POINT.

Anyone who thinks folks cannot just walk away, you are wrong. In non recourse states like AZ CA you CAN walk away, jingle mail. They cannot come after you for the loss AND the Congress passed the 2007 Mortgage Debt Relief Act so no folks the IRS is NOT sending 1099s to these people.  Stop the freefall or it will spread across the country, AZ, CA FL, NV represent 21% of our national GDP folks.

I am doing all I can to stay and the damned FAN and servicer will not make any offer, we have lost income and are underwater, it is like they WANT us to walk away, they likely do, the investors have hyped prices back up to 2004 levels here, it is another bubble happening before our eyes and no one will stop it.

NYT:

…Fannie Mae recently warned, for example, that it could not pay the dividends it owes the Treasury, so “future dividend payments will be effectively funded with equity drawn from the Treasury.”

All the companies have recently drawn new government money or are in talks to do so:

Fannie Mae and Freddie Mac, which buy and resell mortgages, have used $112 billion — including $15 billion for Fannie in November — of a total $400 billion pledge from the Treasury.

Now, according to people close to the talks, officials are discussing the possibility of increasing that commitment, possibly to $400 billion for each company, by year-end, after which the Treasury would need Congressional approval to extend it. Company and government officials declined to comment….

Reminder, Fannie Mae % of loans ‘seriously delinquent per total number of loans since 1998:

December 17, 2009. Tags: , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

Housing: FINALLY! Some data on the trial mods! Treasury reports more than 27% of homeowners in trial modification are delinquent…

They were forced to answer the inquiry on status of the 600,000+ trial mods finally, and it ain’t good. Not good at all. What IS good is that we are getting some data. Just last week HUD Treasury was claiming no one was late on these payments. On tv in fact, in an interview with Diana Olick which we posted here.

The real shxtstorm is gonna hit us when FANNIE and 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 it’s premiums, cuz guess what? They need a frakkin bailout…

When will these fools stop trying everything BUT the damned HOLC!!!?!? AARRRGLE! This Admin is so frakking enamored of everything ELSE FDR did why not this? Oh yeah HRC suggested it in 2007 and 2008, thus Obama won’t do it. Frakkers. Their next ingenius plan will be the HEMAP model so taxpayers can LOAN homeowners their mortgage payments. Again padding servicers pockets and not addressing the underlying issue. Via FAN FRED we OWN THE DAMNED HOUSES ALREADY!! Why not buy them outright under HOLC and cut a deal with the homeowners directly with the government. It would be less ongoing intervention and cost less dammit. This is yet ANOTHER example of an actual CRISIS that Team Obama has FAILED to address successfully, while they focus all their attention on health care, housing is falling off a cliff and it WILL drag the entire economy down with it…again.

ABCNews:

More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found. Some 650,000 borrowers are participating in the trial phase of the Obama administration’s Home Affordable Modification Program, a $75 billion taxpayer-financed program launched this year….

…A Treasury Department survey of large mortgage servicers found “over 73 percent of borrowers are current in their trial plan payments,” Assistant Treasury Secretary Herbert Allison told a congressional oversight panel.

That leaves about 27 percent who are delinquent on the payments.

Allison provided written answers to questions raised at an October hearing before the Congressional Oversight Panel, which monitors the government’s foreclosure prevention plan and other financial rescue efforts.

Allison said that “while not all eligible borrowers will convert to permanent modifications, it is too early to estimate a failure rate, diagnose causes and predict future success rates.”

Let me give them a hand. The diagnosis of the underlying cause is UNEMPLOYMENT. The failure rate is TOO LARGE. The future success rate will FALL as UE rises. DO THE DAMNED HOLC! (Read HRC WSJ OPED on the HOLC from September 24, 2008 at link)

Experts say the conversion rate to permanent loans is the key to determining the program’s ultimate success or failure.

The Treasury has not published figures on how many trial loan modifications have been made permanent, but it said it will start doing so this month.

The next monthly report on the program will be released next week, Treasury Department spokeswoman Meg Reilly said.

This week Treasury officials threatened to fine mortgage lenders unless they speed efforts to give hard-pressed homeowners a permanent break on monthly payments….

December 6, 2009. Tags: , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

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