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

[Mephistopheles]

So looks like that politico piece was fake huh? Haven't heard a peep today..

[merkhet]

Politico piece?

[doughishere]

Yeah what politico piece? You holding out on us Meph?  ;)

[tede02]

Regarding the proposals made by Corker, it seems like everything he wants to do could be implemented within the existing GSEs.  However, as I understand his proposal, he would wipe out the existing GSEs and basically just replace them with one or more newly created entities that incorporate the changes he would like for the system.  I suppose "getting rid of Freddie and Fannie" sounds good politically in some circles.  But practically speaking, it seems kind of dumb to eliminate these two massive institutions that have decades of knowledge, experience and data in mortgage finance, not to mention their existing infrastructure (employees, technology, etc.) and start from scratch.

 

Additionally, as I understand Corker's proposal, it still incorporates the key to the entire US housing market, government backing (although a bit watered down).  Ackman, Bethany Mclean and others all seem to be correct in that there really isn't another viable option other than the GSEs if the country wants to maintain access to the 30 year fixed rate mortgage.  I guess we (as a country) could set-up new institutions with different names.  But what's the point (other than politics) if the system is fundamentally the same (meaning the government backing largely stays in tact)?  It is all political. 

 

[doughishere]

Regarding the proposals made by Corker, it seems like everything he wants to do could be implemented within the existing GSEs.  However, as I understand his proposal, he would wipe out the existing GSEs and basically just replace them with one or more newly created entities that incorporate the changes he would like for the system.  I suppose "getting rid of Freddie and Fannie" sounds good politically in some circles.  But practically speaking, it seems kind of dumb to eliminate these two massive institutions that have decades of knowledge, experience and data in mortgage finance, not to mention their existing infrastructure (employees, technology, etc.) and start from scratch.

 

Additionally, as I understand Corker's proposal, it still incorporates the key to the entire US housing market, government backing (although a bit watered down).  Ackman, Bethany Mclean and others all seem to be correct in that there really isn't another viable option other than the GSEs if the country wants to maintain access to the 30 year fixed rate mortgage.  I guess we (as a country) could set-up new institutions with different names.  But what's the point (other than politics) if the system is fundamentally the same (meaning the government backing largely stays in tact)?  It is all political.

 

 

Yeah it is all political. Corker at the end of the day can say he did something while in Congress. He is postureing to get re-elected....He might be on his way out. His seat isnt up until 2018. Notice he kinda diggs at his own party and the rest of congress. Think he has anymore friends left in congress? According to Bill Maloni, probably not.

 

 

Bill Maloni

DCBill  Wednesday, 10/07/15 03:32:10 PM

Re: None

Post # 

315904

of 316040 Go

 

Calling the Senate Ethics Committee;

Situation, here in the Corker office!

 

www.valuewalk.com/2015/10/sen-bob-corker-calls-on-viewers-to-short-fannie-mae/

 

 

What a thoroughly stupid, unethical, and just plain dumb thing to do.

 

I am speaking about Sen. Bob Corker (R-Tenn.) going on national television with Rick Santelli, today, and suggesting investors “short” Fannie Mae and Freddie Mac stocks.

 

Why would this public official—or any public official--tout buying or selling stock in any publicly held company?

 

The man is a GSE critic, fine. But he has his DNA all over legislation to abolish and otherwise handcuff the companies and certainly their current public shareholders. (Can the Admin—owners of 79% of the entities--be happy with their guy Bobby?).

 

The Senate Ethics office immediately should be asked look into Corker’s antics.

 

Plus, there are more than 20 (some consolidated) court cases pending against the US Treasury over Fannie and Freddie mistreatment.

 

How can Corker know what will happen with those cases, especially the Delaware case, which on the face of it, seems to suggest Treasury had no authority vis-à-vis Delaware corporations (which Fannie is) to manipulate the preferred stock Treasury created in Fannie and Freddie as a preparation for its 2008 takeover called “conservatorship.”

 

Someone should give Senator Corker a ride out of town on a Tennessee walking horse!

 

Maloni, 10-7-2015

 

 

 

 

There was another link over at gselinks from the fairlome case....more people want to look at the documents huh?

[doughishere]

Bethany: "WTF, mate."

 

 

http://video.cnbc.com/gallery/?video=3000430360

[Mephistopheles]

Politico piece?

Yeah what politico piece? You holding out on us Meph?  ;)

 

LOL sorry guys! It's been a crazy few days of work and no sleep. I was referring to the "Political Alpha" piece from a few days ago, which somehow I thought was "Politico", which is a news site. I did a bunch of Google searches of "Politico Fannie Mae" and couldn't find a thing in regards to that report so I concluded it was a hoax.

 

Having said that, I agree with some others who say we should take it with a grain of salt. Hell, even the timhoward site is saying this is a "parody". That's when you know that perhaps you are too bullish on FNMA, when even that site is bearish on your thesis.

[doughishere]

I knew I couldn't let the thread get to the second page.

 

Mario Ugoletti, a senior official at the Federal Housing Finance Agency, retired in September, an agency spokesman told The Post.

 

Ugoletti’s FHFA exit came shortly after an Aug. 19 Fairholme court filing alleged that he had made “at a minimum, misleading” statements to a federal court that aren’t “credible.”

 

And the plot thickens.....

[merkhet]

More fun stuff from an interview w/ Corker on CNBC this morning.

 

http://video.cnbc.com/gallery/?video=3000431791

 

Notice how Corker is talking about turning the GSEs into utilities...

[doughishere]

More fun stuff from an interview w/ Corker on CNBC this morning.

 

http://video.cnbc.com/gallery/?video=3000431791

 

Notice how Corker is talking about turning the GSEs into utilities...

 

 

What a moron. Does he stop and listen to himself?

 

 

Let me paraphrase what he says....."I hope they become utilities.....at some point I want them to come back out to the markets" In other words Id rather transfer the entities to the "group im meeting with later today."

 

 

 

[merkhet]

I'm just happy he's stopped talking about a wind down.

[doughishere]

I'm just happy he's stopped talking about a wind down.

 

 

Yeah.....the tide is starting to shift....things are definitely more positive.......dont tell luke but im starting to board the hype train.

 

[Luke 532]

I'm just happy he's stopped talking about a wind down.

 

Yeah.....the tide is starting to shift....things are definitely more positive.......dont tell luke but im starting to board the hype train.

 

I wouldn't call it "hype."  It's more like paying close attention to (1) what is happening, and (2) what important players are saying, and as a result adjusting expectations when/if the situation warrants it.  I believe the odds of FNMAS holders returning to par has been increasing for months and the payoff is roughly risk $1 to profit $4.  Some call it hype, I call it an improving risk/reward.

[doughishere]

Sorry....i was just trying to be a little a little amusing. I get what you are saying.

[Luke 532]

Sorry....i was just trying to be a little a little amusing. I get what you are saying.

 

I understand.  I just don't want people to dismiss the developments over the past few months as merely hype.  There has been some very substantial progress and I hope people don't miss it.

[doughishere]

Sullivan on Corker this morning.

 

 

http://www.valueplays.net/2015/10/13/sen-corkers-about-face-on-gses/?utm_content=buffer96a83&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

[orthopa]

I'm just happy he's stopped talking about a wind down.

 

Yeah.....the tide is starting to shift....things are definitely more positive.......dont tell luke but im starting to board the hype train.

 

I wouldn't call it "hype."  It's more like paying close attention to (1) what is happening, and (2) what important players are saying, and as a result adjusting expectations when/if the situation warrants it.  I believe the odds of FNMAS holders returning to par has been increasing for months and the payoff is roughly risk $1 to profit $4.  Some call it hype, I call it an improving risk/reward.

 

Luke. I know it maybe buried in this 192 page thread but do you see the same for the common shares? Seems like the potential pay off is much higher there.

[Luke 532]

I wouldn't call it "hype."  It's more like paying close attention to (1) what is happening, and (2) what important players are saying, and as a result adjusting expectations when/if the situation warrants it.  I believe the odds of FNMAS holders returning to par has been increasing for months and the payoff is roughly risk $1 to profit $4.  Some call it hype, I call it an improving risk/reward.

 

Luke. I know it maybe buried in this 192 page thread but do you see the same for the common shares? Seems like the potential pay off is much higher there.

 

When compared to the prefs, I don't like the common.  Sure, the potential payoff is higher but I don't think the added risk justifies the possible increase in upside.

 

There is some useful information in this thread discussing various scenarios in which FNMA gets hurt while FNMAS does well.  I'll try to find it...

[Luke 532]

Here are 2.  There are more but I don't have the desire to go through the thread to find them right now.

 

This post from Merkhet...

 

Thanks twacowcfa.

 

I think that we have to think of two (maybe three) different possible end games here.

 

(1) Court of Federal Claims:

 

In Sweeney's Court, no one is contesting the Net Worth Sweep ("NWS") -- they are just assuming that the Government has the authority to take the property. Instead, they are merely asserting that they should be paid for the fact that the sweep has essentially expropriated their dividend rights and their liquidation preference. In other words, "but for" the NWS, the windfall over the past few years would have dropped down to the Private Preferred.

 

Think of it this way, can you add up to $222 billion in a liquidation? ($187B Senior Preferred + $35B Private Preferred.) Well, F&F have paid out $228 billion over the last few years, so it sure looks like it's possible. Even if you tack on the $56 billion for the 10% dividend, you've got Pershing Square saying that the Fixed Income Arbitrage department can produce $24 billion over the next two years or so. Add that to the $6 billion of equity remaining in the companies, and you're looking for $20 billion from the companies' earning power -- I suspect that they could do that in a little over a year or so.

 

I have no idea what happens to the common here.

 

(2) Reversing the NWS:

 

Similar to the above, you'd net out $56 billion from the $228 billion (for the 10% dividend on the Government Preferred) so you're left with $172B + $6B equity left in the companies or $178B in equity on the books. Can the combined net income from the two companies support the $18.7B in 10% dividends paid out to the Government Preferred? (You'd have to run your own numbers on this one, but my personal calculations indicate that they probably could.) And then you've got $178B "stuck" in the two companies unless there's either a release or a receivership -- either way, the Private Preferred is well covered.

 

(3) Let's Make a Deal:

 

In a deal, it's likely that the deal struck for Private Preferred will take into consideration that they're pretty well covered in (1) and (2).

 

That's the way that I'm looking at this, anyway.

 

Another from Vish_ram...

 

I think there are several possible outcomes , each offering a different upside to common.

 

Option1: Privatize F&F after paying off UST;

  pros: pref goes to par, may also get accrued dividends, common gets all the upside

  cons: the new entity will be without implicit guarantee, will be a monopoly controlling >60% market.   

          New competitors may emerge, but will be slow to catch up. A potential anti-trust action can 

          ensue

 

Option 2: berkowitz plan

          run off (govt + common benefit) + newco (mostly pref and some common)

          pros: pref gets more upside (no wonder berkowitz is proposing it)

                  common: limited upside compared to Option 1

 

Option 3: Govt does nothing in near term (1-3 yrs)

          pros: pressure grows to reinstate div on pref, pref goes up

                  common languishes in uncertainty

 

Option 4: Govt puts f&f in run off, gets paid with principal & interest, pays off pref with div (buys back all pref) and rest accrues to common.

 

              Govt lets private companies underwrite guarantee. Companies like brk, aig, ..etc start setting up shop and competes for biz.

        pros: pref gets paid fully

        cons: limited upside to common, milks the run off. How do we deal with existing f&f employees, patents, infrastructure once runoff is complete? there could be lots of opposition from this stakeholder.

 

I think 3 & 4 are likely options.

 

disclaimer: long pref.

[doughishere]

Just came across my desk......back to studying.

 

 

Dear Shareholder,

 

In a Washington Post Op-Ed published online this afternoon, Bethany McLean argues that “we still need Fannie and Freddie, even more now than before.”

 

She emphasizes that “since 2008, while Fannie and Freddie have sat in limbo, homeownership has plunged” and that it is time to “use Fannie and Freddie for what they were designed to do: support homeownership for those who can afford it, and support the financing of multi-family housing that working people can afford.”

 

We encourage you to read the Op-Ed in its entirety below or by clicking on the following link: “Government-backed mortgage lenders are the definition of too big to fail. Too bad we need them more than ever.”

 

Kind regards,

 

Investor Relations

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

 

 

-------------------------------------------------------------------------------------------------------------------

Government-backed mortgage lenders are the definition of too big to fail. Too bad we need them more than ever.

Washington Post – Opinion

By Bethany McLean

15 October 2015

 

If there’s one thing with which most of Washington has long agreed, it’s this: Fannie and Freddie must die.

 

That’s Fannie Mae and Freddie Mac, the mortgage giants that prop up much of the American housing market and have been operating under government control since the financial crisis seven years ago. “There’s a majority of people here that believe that they should be wound down and replaced so that the taxpayers are not backing them up as they are today,” is how Sen. Bob Corker (R-Tenn.) put it last week. In one of his few mentions of the topic, President Obama described Fannie and Freddie’s business model as “heads [they] win, tails taxpayers lose,” meaning that although their executives and shareholders profited in the good times, the implicit belief that the government stood behind them — which was the core of their business model — would force taxpayers to cover the losses in a crisis. Which we did.

 

The critics are right about the flaws of both institutions: Fannie and Freddie agglomerated too much political power before they went bust, and their drive for market share during the housing boom early in the past decade left taxpayers on the hook to bail them out.

 

But we still need Fannie and Freddie, even more now than before.

 

They own or guarantee the payments on more than $5 trillion in American mortgages, or about 60 percent of the total. In the years since the financial collapse, they have been the major source of credit for most people who got mortgages, and the only source of credit for less-than-pristine borrowers. Washington is paralyzed. Even Corker, when pressed, backed away from his call to eliminate them, because despite the hatred of the housing giants, collectively known as “government-supported entities,” or GSEs, no one wants to see what would happen without them, and no one can agree on how to replace them.

 

As a result, there’s no plan for how the United States will finance housing in the future. Without a housing finance policy, there is no housing policy. And that’s a huge problem, because another crisis — about how people will afford a place to live — is brewing.

 

Since 2008, while Fannie and Freddie have sat in limbo, homeownership has plunged. This summer, the Census Bureau reported that the homeownership rate had fallen to 63.4 percent, the lowest level in 48 years. (It had peaked at 69 percent, in 2004.) “Renter nation,” one blog called the United States. The decline is particularly pronounced in minority communities. At the Congressional Black Caucus Foundation’s annual legislative conference this year, housing advocates pointed out that the homeownership rate for the black population has decreased from nearly 50 percent in 2004 to about 43 percent, its lowest level in 20 years. It’s projected to continue to drop.

 

Pundits have argued that the homeownership rate was, and maybe still is, too high, because too many people were getting mortgages they couldn’t afford. But if people don’t own (and don’t sleep on the street), they rent — and rents have been steadily rising since 2000, while incomes have not kept pace. In the third quarter of this year, rents increased by 5.7 percent year over year, according to Morningstar, and they rose at a double-digit clip in some large cities such as San Francisco and Denver. (Rents in Washington were up just 1.44 percent year over year, according to the online real estate database Zillow, in part because of rent-control laws.) The Wall Street Journal recently noted that a pending merger of two companies that own single-family rental homes is predicated on rents continuing their rise.

 

Stan Humphries, the chief analytics officer at Zillow, has called what’s coming a “rental crisis.” According to Zillow’s data, while homeowners with a mortgage can expect to spend about 15.3 percent of their income on monthly housing bills, renters must plan to set aside almost double that share. As rents rise, it gets harder to save for the down payment required to buy a home. Add in the burden of student loans, and financial challenges increase. According to an analysis by Enterprise Community Partners and the Harvard Joint Center for Housing Studies, since the start of the 2000s, the number of severely cost-burdened renters in the United States — meaning those who pay more than half their income in rent — has risen substantially, from 7 million in 2000 to 11.3 million in 2013. The number is expected to keep increasing.

 

There’s a logical response to this, which is to use Fannie and Freddie for what they were designed to do: support homeownership for those who can afford it, and support the financing of multi-family housing that working people can afford.

 

In Washington policy circles, reviving the GSEs is considered something that shouldn’t be discussed in polite company. The complaints about their pre-crisis business model are accurate — but some of the other criticisms are wrong, and even contradictory.

 

One argument is that in their previous incarnation, Fannie and Freddie caused the financial crisis by helping unqualified people buy homes, in the name of following mandates from Congress to meet housing affordability goals. But the financial crisis wasn’t caused by putting people in homes. It was caused by people of all income levels speculating on homes as investment properties, and using their homes as credit cards, extracting money from them via cash-out refinancing. According to Jason Thomas, the director of research at the Carlyle Group, only about a third of subprime mortgages that were turned into mortgage-backed securities between 2000 and 2007 were used to buy homes. And a study published by the National Bureau of Economic Research in early 2014 found that the wealthiest 40 percent of borrowers obtained 55 percent of the new loans in 2006 — the peak year of the bubble — and that over the next three years, they were responsible for nearly 60 percent of delinquencies.

 

Another old criticism contradicts that one: In the 1990s, critics — from activists on the left, to American Enterprise Institute scholar Peter Wallison on the right, to the Congressional Budget Office — argued that Fannie and Freddie never did much to foster homeownership or lower mortgage rates. Maybe this was true in the golden years of the 1990s, when there was no shortage of private capital to be lent for real estate. But we certainly needed Fannie and Freddie in the wake of the crisis. And although there is a lot of analysis about what a market without government support would look like, the simple truth is that Fannie has been around for almost 80 years. Anyone projecting how the housing market would appear without it is just guessing.

 

Still, there is fairly widespread agreement that some things we take for granted, such as a 30-year, fixed-rate, pre-payable mortgage, wouldn’t exist without a government backstop. Investors simply don’t want that risk. That’s part of the reason Congress has done nothing with the institutions since the government took them over. Without the government support, not much would change for the very wealthy. But most analysts agree that a great swath of the middle and lower class probably would get five- to 15-year mortgages with floating rates, rates that would vary significantly depending on income and geography. Mortgage capital might be hard to come by in times of stress. Home prices probably would decrease. With an affordable-housing crisis in the works, and when even the Wall Street Journal is publishing essays about the squeeze on the middle class, it is probably not politically feasible or wise to experiment if you care about the social fabric of the country.

 

Most supposedly “free market” solutions assume that the big banks would take greater control of the mortgage market without Fannie and Freddie. But the big banks were bailed out in 2008, too. The Dodd-Frank financial reform legislation may have fixed the “too big to fail” issue. (That’s debatable, but give it the benefit of the doubt.) If banks control the nation’s mortgage market, does anyone think they’ll be allowed to fail in the next crisis? In which case, how are they not government-supported entities, as well?

 

One legitimate complaint about the old Fannie and Freddie was the way they garnered political clout through their promotion of homeownership. In their heyday, it was immense and ugly. (“Fannie has this grandmotherly image, but they will castrate you, decapitate you, tie you up, and throw you in the Potomac,” a congressional source told the International Economy in the late 1990s. “They are absolutely ruthless.” That would pale next to the political clout of a big bank that also controlled the mortgage market, and whatever evils grew out of the GSEs’ need to please politicians, there could be worse. Imagine the conversation in a back room between the politicians and the bank executives, where they agree that if the bank will loosen up credit in their states, the politicians will go easy on, say, derivatives regulation. It almost makes the old Fannie and Freddie look pure.

 

Fannie and Freddie have legitimate problems. As Obama said, theirs was a flawed business model in which the drive for profits ultimately led to their failure. Many economists also argue that any subsidy eventually leads to corruption. But there are ways to mitigate these issues. Regulate Fannie and Freddie like utilities, with limits on the returns they can make. Create incentives that encourage them to pull back from the market when it’s overheating, instead of chasing market share. Give them as competent a regulator as possible. Encourage Fannie and Freddie to get private capital to bear risk ahead of them, which they are trying to do, and which is how their existing multi-family businesses operate.

 

None of this would satisfy the Fannie and Freddie bloodlust. Nor would it be perfect. But if perfect is out there somewhere, it’s time to propose it. We need a housing policy.

 

Bethany McLean is a contributing editor at Vanity Fair and the author of "Shaky Ground: The Strange Saga of the U.S. Mortgage Giants."

 

 

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

 

[orthopa]

Here are 2.  There are more but I don't have the desire to go through the thread to find them right now.

 

This post from Merkhet...

 

Thanks twacowcfa.

 

I think that we have to think of two (maybe three) different possible end games here.

 

(1) Court of Federal Claims:

 

In Sweeney's Court, no one is contesting the Net Worth Sweep ("NWS") -- they are just assuming that the Government has the authority to take the property. Instead, they are merely asserting that they should be paid for the fact that the sweep has essentially expropriated their dividend rights and their liquidation preference. In other words, "but for" the NWS, the windfall over the past few years would have dropped down to the Private Preferred.

 

Think of it this way, can you add up to $222 billion in a liquidation? ($187B Senior Preferred + $35B Private Preferred.) Well, F&F have paid out $228 billion over the last few years, so it sure looks like it's possible. Even if you tack on the $56 billion for the 10% dividend, you've got Pershing Square saying that the Fixed Income Arbitrage department can produce $24 billion over the next two years or so. Add that to the $6 billion of equity remaining in the companies, and you're looking for $20 billion from the companies' earning power -- I suspect that they could do that in a little over a year or so.

 

I have no idea what happens to the common here.

 

(2) Reversing the NWS:

 

Similar to the above, you'd net out $56 billion from the $228 billion (for the 10% dividend on the Government Preferred) so you're left with $172B + $6B equity left in the companies or $178B in equity on the books. Can the combined net income from the two companies support the $18.7B in 10% dividends paid out to the Government Preferred? (You'd have to run your own numbers on this one, but my personal calculations indicate that they probably could.) And then you've got $178B "stuck" in the two companies unless there's either a release or a receivership -- either way, the Private Preferred is well covered.

 

(3) Let's Make a Deal:

 

In a deal, it's likely that the deal struck for Private Preferred will take into consideration that they're pretty well covered in (1) and (2).

 

That's the way that I'm looking at this, anyway.

 

Another from Vish_ram...

 

I think there are several possible outcomes , each offering a different upside to common.

 

Option1: Privatize F&F after paying off UST;

  pros: pref goes to par, may also get accrued dividends, common gets all the upside

  cons: the new entity will be without implicit guarantee, will be a monopoly controlling >60% market.   

          New competitors may emerge, but will be slow to catch up. A potential anti-trust action can 

          ensue

 

Option 2: berkowitz plan

          run off (govt + common benefit) + newco (mostly pref and some common)

          pros: pref gets more upside (no wonder berkowitz is proposing it)

                  common: limited upside compared to Option 1

 

Option 3: Govt does nothing in near term (1-3 yrs)

          pros: pressure grows to reinstate div on pref, pref goes up

                  common languishes in uncertainty

 

Option 4: Govt puts f&f in run off, gets paid with principal & interest, pays off pref with div (buys back all pref) and rest accrues to common.

 

              Govt lets private companies underwrite guarantee. Companies like brk, aig, ..etc start setting up shop and competes for biz.

        pros: pref gets paid fully

        cons: limited upside to common, milks the run off. How do we deal with existing f&f employees, patents, infrastructure once runoff is complete? there could be lots of opposition from this stakeholder.

 

I think 3 & 4 are likely options.

 

disclaimer: long pref.

 

Thanks, reason I ask I hold both and at this point more common. Im not smart enough to know which will do better long term. The lottery type nature of the common is alluring. Ackmans common exposure leads me to believe it maybe worth the risk but again I have more common then preferred so I wil add some more preferred as some funds became available.

[merkhet]

The short answer is that the preferred holds less of a risk of being a zero than the common. Significantly less, in my opinion.

[Luke 532]

Thanks, reason I ask I hold both and at this point more common. Im not smart enough to know which will do better long term.

 

I should mention that I'm in the preferred until they reach (or get near) par.  I'm not interested in the 8.25% rate unless it is reinstated and FNMAS continues to trade significantly below par.  I will reevaluate the situation when FNMAS reaches par and may very well consider a position in the common at that time.  But for the here and now, I'm in FNMAS.  In other words, long-term isn't really what I'm focused on here at this time (if long-term is 10+ years from now).  I'm focused on getting the NWS and conservatorship mess fixed, profit from it, and then take a fresh look at the prospects of Fannie.

[merkhet]

http://www.bloomberg.com/news/articles/2015-10-16/obama-adviser-set-to-dismiss-rumors-of-fannie-freddie-share-sale

 

That would be a setback.

 

EDIT: I don't have access to double-check this myself, but someone has informed me that Michael Stegman is actually not on the schedule for the Mortgage Bankers Association Expo that started this weekend. So... that's a bit of a twist.

 

http://events.mortgagebankers.org/102nd_Annual/sessions/default.aspx

 

EDIT #2: Looks like someone found Stegman.

 

http://events.mortgagebankers.org/102nd_Annual/sessions/MoreInfo.aspx?c=90884

[orthopa]

Thanks, reason I ask I hold both and at this point more common. Im not smart enough to know which will do better long term.

 

I should mention that I'm in the preferred until they reach (or get near) par.  I'm not interested in the 8.25% rate unless it is reinstated and FNMAS continues to trade significantly below par.  I will reevaluate the situation when FNMAS reaches par and may very well consider a position in the common at that time.  But for the here and now, I'm in FNMAS.  In other words, long-term isn't really what I'm focused on here at this time (if long-term is 10+ years from now).  I'm focused on getting the NWS and conservatorship mess fixed, profit from it, and then take a fresh look at the prospects of Fannie.

 

I see. Im partial to dividends so I would keep the preferred. The YOC for some of the preferreds would be in the 20-30% range. Beautiful if you ask me. If the common shot up Id probably just buy more compounders/dividend stocks so Ill stick with them to the end. I would be ok with waiting 10 years. At 5-6% of my portfolio I can ignore it for that long and not have it drag on my returns.

 

Just wondering if what scenario do you think the preferred would trade at par and the common would not be many multiples of what it is now? I would have to imagine if the preferred shot up to par the common would be many many multiples of what it is now.