Luke 532

Where's the smack my head emoticon... Right next to the "I can't believe I didn't load up in September 2017" emoticon ;D

Hah! We all typed the same thing about 30 seconds apart :-)

Paraphrased "Given the delays on tax reform I think the GSE's will be fixed in 2018." Later, he said "as I've said all along I expect Watt to make the dividend payment."

The news is getting around (nothing new here for us, just wanted to post this as the story is gaining more traction)... https://www.insidemortgagefinance.com/imfnews/1_1191/daily/rnc-wants-fannie-mae-freddie-mc-to-build-capital-1000042848-1.html#Login September 14, 2017 Short Takes: The RNC is on Board with Fannie and Freddie Building Capital / GSE Investors Might be Sitting Pretty By Paul Muolo and Brandon Ivey and Sherry Muolo, pmuolo@imfpubs.com, bivey@imfpubs.com, smuolo@imfpubs.com A few weeks back, the Republican National Committee passed a resolution stating that “no financial institution” in the U.S. can safely operate without adequate capital, noting that taxpayers will “not be sufficiently protected until Fannie Mae and Freddie Mac are permitted to rebuild equity capital.” The two GSEs will see their capital buffer fall to zero in less than four months… The same proclamation adds that the RNC recognizes the sanctity of property rights and “acknowledges the need to resolve the outstanding claims of Fannie Mae and Freddie Mac shareholders in a manner that honors and respects the rule of law governing the rights of corporate stockowners.” For the full story, see the Friday edition of Inside MBS & ABS… Of course, the RNC does not govern, but presumably the Trump administration has a line of communication into the political organization… https://www.insidemortgagefinance.com/imfnews/1_1191/daily/Senate-Banking-democrats-want-gses-to-Build-Capital-1000042847-1.html?ET=imfpubs:e9805:73599a:&st=email&s=imfnews September 14, 2017 Senior Democrats on Senate Banking Committee Implore Treasury, FHFA to Allow GSEs to Build Capital By Paul Muolo, pmuolo@imfpubs.com Six senior Democrats on the Senate Banking Committee late Wednesday sent a letter to Treasury Secretary Steve Mnuchin and GSE regulator Mel Watt, urging the two men to allow Fannie Mae and Freddie Mac to build capital. The correspondence, which includes the signature of ranking minority member Sherrod Brown, D-OH, notes: “We are simply requesting that the GSEs be permitted to build capital. We do not believe they should be released from conservatorship absent reform.” The six also express their concern that Mnuchin is not working with Watt to “prevent another draw” on Treasury funds in the event Fannie and Freddie need another cash infusion. Fannie and Freddie have been posting strong profits for most of the decade, but under a change made to the preferred stock purchase agreements in 2012 their allowable capital buffer declines each year at a measured pace, eventually falling to zero in early 2018. There’s a concern that if either posts a loss next year (most likely from hedging activities), Treasury funds will be needed to maintain a net worth position above zero so investors in their mortgage bonds don’t get spooked.

I don't think there will be a legislative solution, but now we have both Democrats and Republicans publicly asking Mnuchin to allow the GSE's to build capital. Both the Democrat and Republican documents started circulating on the Internet yesterday... I'm sure that's just a coincidence. ;) At the very least, it gives Mnuchin a lot of political cover to do the right thing and allow the GSE's to build capital. Democrat letter and Republican document attached. FNMAS_Republican_resoultions.pdf

My mistake, I don't see it now after a second reading. I could have sworn I read it in that article. I'm reading so many articles that I'm getting them mixed up... my apologies for the confusion.

And Mnuchin is speaking about the GSE's today at the Politico Summit: http://www.politico.com/tipsheets/morning-money/2017/09/13/mnuchin-and-more-at-politico-pro-summit-222249

https://prod-cdn-static.gop.com/media/documents/Resolution+on+Protecting+Taxpayers+by+Restoring+Safety+and+Soundness+to+Government-Sponsored++Enterprises.pdf I think this came out last week (right click, view page info, see date... not sure if that's how to accurately check the date of this document). Very interesting. With the Democrat letter to Mnuchin today, it sure seems like both sides of the aisle are getting on board. "Safety and Soundness" sound an awful lot like the Moelis plan.

Letter: https://twitter.com/BrolinWalters/status/908091408757686272

Best ideas for remainder of 2017... FNMAS, FNMAH, FMCCL.

Chad Pergram‏Verified account @ChadPergram 11m11 minutes ago Ryan says Brady told GOPers principles of tax reform to be released Sept 25. Consensus of what the Big 6 envisions

Agreed. For the short-term I think this bodes well for an increased likelihood of some adjustment to the sweep scheduled for later this month. With that said, withholding $1B and sending the rest to Treasury would be a negative, in my opinion. Changing payment to annual instead of quarterly would be positive, in my opinion. We'll see what happens... just about 3 weeks max to find out what will happen with the September payment.

Hmmmm.... Mnuchin and NAFCU Chairman of the Board, Rich Harris, earlier this morning (see attached pic).

This makes it seems that they discussed a settlement and couldn't agree on terms. Is this the first indication that the government might be willing to settle (relatively soon?) and not just delay and fight to the bitter end? If they are again discussing settlement it would not be the first time the government showed it was willing to settle... +1. Add to it that the gov't asked for terms awhile back, Sherrod Brown's comments, Berkowitz's comments, Political Alpha's piece as reported by Politico, etc... Sherrod Brown/Bruce Berkowitz comments: Brown 12/18/2015... https://www.congress.gov/congressional-record/2015/12/18/senate-section Mr. BROWN. I will say to my colleague from New York that it does not. That is not the effect of the language. Any number of decisions could be made after that date, when a new Congress and a new President will be in place. Nor does this provision have any effect on the court cases and settlements currently underway challenging the validity of the third amendment. As the Senator from Tennessee said yesterday, "this legislation does not prejudice'' any of those cases. Berkowitz 2/23/2016 At 33-minute mark of the call: https://engage.vevent.com/index.jsp?eid=4711&seid=18 "In late 2015 there were settlement communications between plaintiffs and the government. But frankly, given how deep treasury has dug in its heels and has tried to hide the truth by withholding evidence, it remains unclear to me whether treasury is capable of having an earnest conversation." Gov't asking for terms: Jon Prior (Politico) tweet on 2/24/2016: "Treasury, DOJ made no offer last fall, asked for terms." Political Alpha as reported by Politico 4/2/2016: http://www.politico.com/tipsheets/morning-money IS WALL STREET SLEEPING ON GSE REFORM? — Via Political Alpha: “While the 10/19/15 coordinated policy response by the White House and Treasury to our 10/5/15 note, ‘White House Looking into Ending GSE Conservatorship,’ had supposedly put the issue over rebuilding capital at the GSEs to bed, contacts tell us that the debate is still very much alive and ongoing inside the Obama Administration. “Moreover, the discussions have moved to Federal Housing Finance Authority (FHFA), which has the authority to act unilaterally and is now actively reviewing its options and likely to act much sooner than Wall Street is expecting to begin the next major housing reform initiative: rebuilding capital at the GSEs.”

How do you mean?

By Paul Muolo pmuolo@imfpubs.com Industry officials contend that the folks at Treasury namely Secretary Steven Mnuchin and Senior Counselor Craig Phillips are paying a great deal of attention to the future of Fannie Mae and Freddie Mac these days. Both gentlemen are meeting with trade group officials on a regular basis, discussing the topic. As for when a blueprint might appear, thats a different matter. In case youre wondering, the concept of GSE recap and release is not under consideration. For more on the story, see Inside Mortgage Finance late next week One thing Treasury is supposedly looking at is how much capital it takes to be a guarantor of conventional MBS. One figure thats been thrown around is $200 billion

Ryan has said tax reform is the top priority this Fall. Mnuchin reiterated it is the top priority this morning in his interview with Maria Bartiromo. It's shaping up to hopefully get done soon.

Tomorrow @stevenmnuchin1 will talk #TaxReform & leveling the playing field for American job creators on @MorningsMaria Tune in @7:30 am ET!

https://www.insidemortgagefinance.com/imfnews/1_1183/daily/-1000042694-1.html#Login September has finally arrived and that means more hearings on the future of Fannie Mae and Freddie Mac, right? Cowen & Co. is predicting at least one, maybe two hearings in the Senate Banking Committee. But the big question, according to analyst Jaret Seiberg, will be whether Federal Housing Finance Agency Director Mel Watt “permits the enterprises in 2018 to drop to a zero capital position or if he permits them to retain a small share of their profits to build a $1 billion buffer. Also possible is moving to an end-of-year payment to Treasury rather than a quarterly payment. This would smooth out any accounting generated losses that might otherwise precipitate a draw on the preferred capital line.” Stay tuned…

Mnuchin: "Tax reform details will come out later this month*." *I think he meant in September

Mnuchin on CNBC in a few minutes...

Don't think this was posted. It's from late last month and is written by Gary Hindes. http://gselinks.com/pdf/Fanniegate_July_25_2017.pdf

Today from Peter A. Chapman, peter@bankrupt.com In anticipation, presumably, of Judge Lamberth acting on the D.C. Circuit's mandate in the near future, Caroline J. Anderson entered her appearance in the District Court on behalf of Secretary Mnuchin and Treasury.

Mnuchin and NAFCU Chairman of the Board, Rich Harris, earlier this morning (see attached pic).