FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[Guest cherzeca]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

There is no constructiveness in your post.

[Sunrider]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

What's the point of this post? Whether you've been 'entrenched' or not, you're pretty new to CoB&F it seems, so perhaps you may want to lay off that sort of commentary. If you'll go back through posting history you'll see that cherzeca has made many, many insightful contributions to this community over the last decade, in particular on issues of a legal nature.

 

(When I first joined here, I was all fire and brimstone and quick to give offence, and quick to take it - that's not constructive, and it took me a while to realise how that stifles debate and prevents one from learning.)

[investorG]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

[Luke 532]

First Quarter Takeaways, Timothy Howard

https://howardonmortgagefinance.com/2020/05/05/first-quarter-takeaways/

[Guest Covid-19_Survivor]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

I'm not aware of a court case that would kill the seniors. The NWS, of course, but not the seniors themselves.

 

I know I keep harping on them but they've always been my greatest concern. Even when at 10% FnF had no ability to draw down, so they sat, in perpetuity, as "debt" which would consume the majority of our earnings. And I just don't see the treasury dumping them, no matter if by doing so it contributes to a capital raise. Or maybe they become our capital raise. They could be converted to non-cum and sold, and a lot easier than $200 bil of common, imo - after the way the 2 firms have been treated for the past decade.

[orthopa]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

What's the point of this post? Whether you've been 'entrenched' or not, you're pretty new to CoB&F it seems, so perhaps you may want to lay off that sort of commentary. If you'll go back through posting history you'll see that cherzeca has made many, many insightful contributions to this community over the last decade, in particular on issues of a legal nature.

 

(When I first joined here, I was all fire and brimstone and quick to give offence, and quick to take it - that's not constructive, and it took me a while to realise how that stifles debate and prevents one from learning.)

 

I agree. No reason to attack each other. I think most if not all involved in this are or have been frustrated at some point, and as dicussed above cherzeca's legal posts have been invaluable for insight.

 

I dont know if anyone has read the cc transcript but the CFO from Fannie does a good job discussing the financial impacts of what happened in Q1 and how it related to liquidity/conservatorship capital etc.

 

https://seekingalpha.com/article/4342061-federal-national-mortgage-association-fnma-ceo-hugh-frater-on-q1-2020-results-earnings-call

[orthopa]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

I'm not aware of a court case that would kill the seniors. The NWS, of course, but not the seniors themselves.

 

I know I keep harping on them but they've always been my greatest concern. Even when at 10% FnF had no ability to draw down, so they sat, in perpetuity, as "debt" which would consume the majority of our earnings. And I just don't see the treasury dumping them, no matter if by doing so it contributes to a capital raise. Or maybe they become our capital raise. They could be converted to non-cum and sold, and a lot easier than $200 bil of common, imo - after the way the 2 firms have been treated for the past decade.

 

If you dont see treasury dumping them or adressing them in a manner favorable to the preffered why do you hold preferred then?

[investorG]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

I'm not aware of a court case that would kill the seniors. The NWS, of course, but not the seniors themselves.

 

I know I keep harping on them but they've always been my greatest concern. Even when at 10% FnF had no ability to draw down, so they sat, in perpetuity, as "debt" which would consume the majority of our earnings. And I just don't see the treasury dumping them, no matter if by doing so it contributes to a capital raise. Or maybe they become our capital raise. They could be converted to non-cum and sold, and a lot easier than $200 bil of common, imo - after the way the 2 firms have been treated for the past decade.

 

collins would.  if the govt loses, no way they send a $125bn check and hope to make it up on the back end. 

[Guest Covid-19_Survivor]

First Quarter Takeaways, Timothy Howard

https://howardonmortgagefinance.com/2020/05/05/first-quarter-takeaways/

 

Boy, what a great service Mr. Howard provides. Do you know if he's an FnF shareholder?

[Guest Covid-19_Survivor]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

I'm not aware of a court case that would kill the seniors. The NWS, of course, but not the seniors themselves.

 

I know I keep harping on them but they've always been my greatest concern. Even when at 10% FnF had no ability to draw down, so they sat, in perpetuity, as "debt" which would consume the majority of our earnings. And I just don't see the treasury dumping them, no matter if by doing so it contributes to a capital raise. Or maybe they become our capital raise. They could be converted to non-cum and sold, and a lot easier than $200 bil of common, imo - after the way the 2 firms have been treated for the past decade.

 

If you dont see treasury dumping them or adressing them in a manner favorable to the preffered why do you hold preferred then?

 

Because the risk/reward profile has always been in our favor. The only risk here, imo, is those seniors, and even a few months ago when profile decreased to a double (when MM sold), those odds are still favorable against an event (seniors maintained at 10%) which was unlikely to occur.

[investorG]

supreme court opinions out on thursday.  i won't keep posting this but they put out on their web site in advance the days they will release opinions.

[Guest Covid-19_Survivor]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

I'm not aware of a court case that would kill the seniors. The NWS, of course, but not the seniors themselves.

 

I know I keep harping on them but they've always been my greatest concern. Even when at 10% FnF had no ability to draw down, so they sat, in perpetuity, as "debt" which would consume the majority of our earnings. And I just don't see the treasury dumping them, no matter if by doing so it contributes to a capital raise. Or maybe they become our capital raise. They could be converted to non-cum and sold, and a lot easier than $200 bil of common, imo - after the way the 2 firms have been treated for the past decade.

 

collins would.  if the govt loses, no way they send a $125bn check and hope to make it up on the back end.

 

Hmmmmm, maybe the credit for that $125 bil is realized as a draw down on seniors? Could that work? That would leave around $90 bil @ 10% on books. I think that's doable.

[investorG]

First Quarter Takeaways, Timothy Howard

https://howardonmortgagefinance.com/2020/05/05/first-quarter-takeaways/

 

Very good analysis but it doesn't change the fact that the base case is for modest (or worse) profits for the next 1-2 years.  7% unemployment at year end is highly unlikely and home prices aren't likely to be flat as the virus expands when lock downs come off (now) and seasonality worsens later this year.  The visibility into massive public reIPOs is poor even looking out to 2021.  Private equity capital can have longer time horizons and importantly can be quietly negotiated behind the scenes.

[Guest cherzeca]

forbearance requests as a % of servicing volume declining (GSEs orange bar)

 

http://www.mortgagenewsdaily.com/05042020_covid_19_forbearance.asp

 

may be partly a function of more requests made in first week of month when mortgage payments may be due.  will be interesting to see if first week of may spikes up

 

There is no constructiveness in your post. May has little to do with anything.

 

We're at 5%  now, our guru estimates 15%, and it's very possible we go way above that. To avoid that obviousness is counterproductive, given that experts have estimated ~50% of pop contracting virus but only a fraction has to date.

 

You know what would be productive? if some of you boardmembers entrenched in FnF for a decade (like me), but far more knowledgeable, would help us understand poor scenarios, instead of the same old 'the treasury is going to void their $200b because we're special'

 

The retirement of the sr pref imo either needs a) a definitive court win and/or b) a concurrent announcement of a private equity capital raise + full or partial warrant exercise / monetization.  It's up to the leaders to take a stand, do the required work, and right the (nws) wrong, going on the backup plan if rule of law's Seila analysis doesn't come to fruition.

 

@investorG

 

in my own mind, I think we are set up for either (i) an important win (by analogy) in seila, which the fhfa and treasury will hopefully see (as I see) will lead to a victory in collins (since collins is not distinguishable on any relevant basis from seila), and indeed they should especially see this if scotus GVRs collins as a consequence, or (ii) continued progression of the administration "plan"...now certainly delayed, leading to consent decree exit from conservatorship either before or in connection with a capital raise. 

 

I dont expect private equity will want to invest big sums into this situation before there is more clarity. I suppose there wont be more clarity until after the election, which I think prompts your call for sooner private equity investment, but I dont see that happening as a practical matter...and I think if treasury and fhfa (with a director calabria who knows he will be replaced if seila comes out as I expect) can always sign the 4th A prior to Calabria nd Mnuchin leaving office if they really care about the GSEs, as it appears they do.

 

a squishier big picture point needs to be made in connection with this covid crisis:  the GSEs can now be viewed as part of the solution by any and all in congress.  even with insufficient capital, the GSEs are going to carry the mortgage finance market through covid, and if you dont believe me, read Tim Howard' post cited by Luke 5:32 above.  so a 4th A can be seen as continuing to do the good work that has resuscitated the GSEs up to this point as opposed to a give away to its investors (with treasury being by far the largest investor by the way)

[Guest cherzeca]

First Quarter Takeaways, Timothy Howard

https://howardonmortgagefinance.com/2020/05/05/first-quarter-takeaways/

 

Very good analysis but it doesn't change the fact that the base case is for modest (or worse) profits for the next 1-2 years.  7% unemployment at year end is highly unlikely and home prices aren't likely to be flat as the virus expands when lock downs come off (now) and seasonality worsens later this year.  The visibility into massive public reIPOs is poor even looking out to 2021.  Private equity capital can have longer time horizons and importantly can be quietly negotiated behind the scenes.

 

the real takeaway from howard's post is the sensitivity analysis he does which shows that the GSEs should be able to manage a 25% decline in housing prices even with current insufficient capital levels...all while Fannie projects flat housing prices (and their economists know more about housing than you and i).  recall that housing prices in 2007 had experienced a huge run up that is not present now, and supply was being aggressively added due to that run up in 2007, and that is not present now.

[Luke 532]

GSE's paying $500 per loan, why?  What a waste.  Even at just 2M loans that's 1B.

 

"The government-sponsored enterprises plan to pay servicers a $500 fee (per loan) to help with forbearance-related issues, according to Jack Navarro, president of #Shellpoint Mortgage Servicing." $NRZ

@IMFpubs

[investorG]

 

@investorG

 

in my own mind, I think we are set up for either (i) an important win (by analogy) in seila, which the fhfa and treasury will hopefully see (as I see) will lead to a victory in collins (since collins is not distinguishable on any relevant basis from seila), and indeed they should especially see this if scotus GVRs collins as a consequence, or (ii) continued progression of the administration "plan"...now certainly delayed, leading to consent decree exit from conservatorship either before or in connection with a capital raise. 

 

I dont expect private equity will want to invest big sums into this situation before there is more clarity. I suppose there wont be more clarity until after the election, which I think prompts your call for sooner private equity investment, but I dont see that happening as a practical matter...and I think if treasury and fhfa (with a director calabria who knows he will be replaced if seila comes out as I expect) can always sign the 4th A prior to Calabria nd Mnuchin leaving office if they really care about the GSEs, as it appears they do.

 

a squishier big picture point needs to be made in connection with this covid crisis:  the GSEs can now be viewed as part of the solution by any and all in congress.  even with insufficient capital, the GSEs are going to carry the mortgage finance market through covid, and if you dont believe me, read Tim Howard' post cited by Luke 5:32 above.  so a 4th A can be seen as continuing to do the good work that has resuscitated the GSEs up to this point as opposed to a give away to its investors (with treasury being by far the largest investor by the way)

 

Just because the value of the GSEs are reinforced doesnt ensure with a change in leadership at FHFA, Congress, and Tsy that a push to return them to private markets continues.  Google some of brad sherman's comments, its easy to see a Dem organization propping up the GSEs but keeping them as extensions of the govt inside conservatorship indefinitely.

 

waiting for a lame duck for a potential 4th amendment is lazy.  I believe private equity would invest tomorrow in conjunction with a collins settlement that puts their fresh convert preferred investment at the top of the capital structure.  Even in a downside receivership type scenario, the waterfall of cash flows could provide them value.  It's up to Mnuchin/Trump and Calabria to make it happen with the help of their advisors.  Plus, it helps citizens to get $ into the GSEs.

[investorG]

GSE's paying $500 per loan, why?  What a waste.  Even at just 2M loans that's 1B.

 

"The government-sponsored enterprises plan to pay servicers a $500 fee (per loan) to help with forbearance-related issues, according to Jack Navarro, president of #Shellpoint Mortgage Servicing." $NRZ

@IMFpubs

 

perhaps you can catch more flies with honey...

[beaufort]

Re Fannie Q1 earnings.

 

There is a significant difference in cash on the balance sheet that changed from December 31, 2019 to March 31, 2020.  The change in cash is from $21,184 to $80,463 (difference of $59,279) and total assets are up to $3,601,356 up from $3,503,319 (difference of $98,037).  There is a corresponding significant change in total liabilities from $3,587,411 up from $3,488,711 (difference of $98,700).

 

The net difference between total liabilities and total assets is nearly a wash, but why did Fannie raise so much cash?

 

Page 11:

 

https://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2020/q12020_release.pdf

[Luke 532]

GSE's paying $500 per loan, why?  What a waste.  Even at just 2M loans that's 1B.

 

"The government-sponsored enterprises plan to pay servicers a $500 fee (per loan) to help with forbearance-related issues, according to Jack Navarro, president of #Shellpoint Mortgage Servicing." $NRZ

@IMFpubs

 

https://www.insidemortgagefinance.com/articles/217942-fanniefreddie-to-pay-servicers-a-500-fee-related-to-covid-forbearance?v=preview

The government-sponsored enterprises plan to pay servicers a $500 fee (per loan) to help with forbearance-related issues, according to Jack Navarro, president of Shellpoint Mortgage Servicing.

 

While the fee hasn’t been announced yet, Navarro provided certain details Tuesday morning during New Residential Investment’s earnings call. (Shellpoint is a subsidiary of the publicly traded REIT.)

 

He said the $500 deferment fee is scheduled to take effect on July 1, pending approval from the Federal Housing Finance Agency. Servicers have seen a surge in forbearance requests due to issues stemming from the coronavirus.

 

“The idea would be to allow borrowers to very quickly go from the forbearance process to a current loan with payments deferred to the end of the mortgage, minimize disruption and maximize the speed to process,” Navarro said.

 

He added that a certain number of borrowers that receive forbearance are going to need full loan modifications and the GSEs and FHFA are still discussing some issues for that process. For the full story, see the next edition of Inside Mortgage Finance, available Thursday afternoon.

[Guest cherzeca]

I am not a big servicer knowitall but I thought servicers get paid for the extra work they put into modification work.  this may be akin to that.  it is worth it to the GSEs for as many loans to be back to full pay, even with modification, as possible, and the servicers will get paid to perform that service on behalf of GSEs

[orthopa]

Re Fannie Q1 earnings.

 

There is a significant difference in cash on the balance sheet that changed from December 31, 2019 to March 31, 2020.  The change in cash is from $21,184 to $80,463 (difference of $59,279) and total assets are up to $3,601,356 up from $3,503,319 (difference of $98,037).  There is a corresponding significant change in total liabilities from $3,587,411 up from $3,488,711 (difference of $98,700).

 

The net difference between total liabilities and total assets is nearly a wash, but why did Fannie raise so much cash?

 

Page 11:

 

https://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2020/q12020_release.pdf

 

On the conference call the CFO mentioned selling bonds to finance the P and I advancements after 4 months for the loans on forbearance? Did they raise cash for this?

[Guest Covid-19_Survivor]

 

@investorG

 

in my own mind, I think we are set up for either (i) an important win (by analogy) in seila, which the fhfa and treasury will hopefully see (as I see) will lead to a victory in collins (since collins is not distinguishable on any relevant basis from seila), and indeed they should especially see this if scotus GVRs collins as a consequence, or (ii) continued progression of the administration "plan"...now certainly delayed, leading to consent decree exit from conservatorship either before or in connection with a capital raise. 

 

I dont expect private equity will want to invest big sums into this situation before there is more clarity. I suppose there wont be more clarity until after the election, which I think prompts your call for sooner private equity investment, but I dont see that happening as a practical matter...and I think if treasury and fhfa (with a director calabria who knows he will be replaced if seila comes out as I expect) can always sign the 4th A prior to Calabria nd Mnuchin leaving office if they really care about the GSEs, as it appears they do.

 

a squishier big picture point needs to be made in connection with this covid crisis:  the GSEs can now be viewed as part of the solution by any and all in congress.  even with insufficient capital, the GSEs are going to carry the mortgage finance market through covid, and if you dont believe me, read Tim Howard' post cited by Luke 5:32 above.  so a 4th A can be seen as continuing to do the good work that has resuscitated the GSEs up to this point as opposed to a give away to its investors (with treasury being by far the largest investor by the way)

 

Just because the value of the GSEs are reinforced doesnt ensure with a change in leadership at FHFA, Congress, and Tsy that a push to return them to private markets continues.  Google some of brad sherman's comments, its easy to see a Dem organization propping up the GSEs but keeping them as extensions of the govt inside conservatorship indefinitely.

 

waiting for a lame duck for a potential 4th amendment is lazy.  I believe private equity would invest tomorrow in conjunction with a collins settlement that puts their fresh convert preferred investment at the top of the capital structure.  Even in a downside receivership type scenario, the waterfall of cash flows could provide them value.  It's up to Mnuchin/Trump and Calabria to make it happen with the help of their advisors.  Plus, it helps citizens to get $ into the GSEs.

 

"its easy to see a Dem organization propping up the GSEs but keeping them as extensions of the govt inside conservatorship indefinitely"

 

Absolutely, and as should be done. But they wouldn't get away with leaving us out to dry. Take us over, Dem's or GOP, no one except your balance sheet gives a rat's ass. But you will pay the owners of these companies first. Our juniors are easy, 25/50/100,000 but you may have more of a legal issue with commons though.

[Guest Covid-19_Survivor]

GSE's paying $500 per loan, why?  What a waste.  Even at just 2M loans that's 1B.

 

"The government-sponsored enterprises plan to pay servicers a $500 fee (per loan) to help with forbearance-related issues, according to Jack Navarro, president of #Shellpoint Mortgage Servicing." $NRZ

@IMFpubs

 

Paying (fee) or fronting (in front of 4 month)? So bad that media sucks today. That post could mean anything.

[Luke 532]

One fund is looking to raise $100,000,000 to buy junior prefs

https://www.hfalert.com/search.pl?ARTICLE=189387