Fannie, Freddie writedowns too costly: regulator - News and Current Events | futures io social day trading
futures io futures trading


Fannie, Freddie writedowns too costly: regulator
Updated: Views / Replies:278 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Fannie, Freddie writedowns too costly: regulator

  #1 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,872 since Nov 2010
Thanks: 3,301 given, 3,332 received

Fannie, Freddie writedowns too costly: regulator

WASHINGTON (Reuters) - The regulator for Fannie Mae (OTC BB:FNMA.OB - News) and Freddie Mac (OTC BB:FMCC.OB - News) told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.

In a letter sent on Friday to the Republican and Democratic leaders of a U.S. House of Representatives government oversight panel, the Federal Housing Finance Agency explained why it has long opposed principal reductions for borrowers who owe more than their homes are worth.

It said it had determined that such reductions would be more costly for the two firms than allowing those troubled borrowers to default.

The regulator has been under pressure from Democrats to permit the write-down of principal by the two government-controlled mortgage finance providers as a way to help some of the millions of U.S. homeowners who are "underwater."

Representative Elijah Cummings of Maryland, the top Democrat on the Oversight and Government Reform Committee, has pushed the housing regulator to explain its thinking in deciding not to offer principal reductions.

FHFA, however, has maintained widespread principal forgiveness would undercut the finances of Fannie and Freddie, which have already received about $169 billion in taxpayer aid. Republicans have supported FHFA's decision.
"FHFA has a statutory responsibility as conservator to preserve and conserve the assets and property of the regulated entities," FHFA's acting director, Edward DeMarco, wrote in the letter to lawmakers dated January 20.

The Obama administration wants to secure widespread principle reductions in a legal settlement between the government and some of the biggest mortgage servicers that is aimed at cleaning up alleged foreclosure abuses.
About 22 percent of U.S. homes have negative equity totaling about $750 billion, according to CoreLogic.

"Given that any money spent on this endeavor would ultimately come from taxpayers and given that our analysis does not indicate a preservation of assets for Fannie Mae and Freddie Mac substantial enough to offset costs, an expenditure of this nature at this time would, in my judgment, require congressional action," DeMarco said in the letter.

Fannie Mae and Freddie Mac were taken over by the government in 2008 as mortgage losses mounted. Millions of soured loans issued during the housing bubble remain on their books and delinquencies on those loans continue to rise.

Fannie Mae and Freddie Mac own or guarantee roughly half of all outstanding mortgages in the United States. Out of the approximate 30 million mortgages guaranteed by the two firms, close to 3 million of those loans were held by underwater borrowers as of last summer, according to analysis provided in the letter.

Another barrier to principal writedowns, aside from pushing losses at the two firms even further, DeMarco said, was the costs associated with new technology and training to servicers that would be needed to launch a program that offers principal forgiveness.

FHFA told lawmakers that forbearance, which allows the borrower to reduce or suspend payments on a loan for a specific amount of time, is a less costly option. Principal forbearance limits accounting losses and allows Fannie and Freddie to recoup the principal at some later point, according to the letter.

The housing regulator also assured lawmakers that FHFA remains committed to helping borrowers to stay in their homes and will continue to work on such principal forbearance plans and government initiatives to modify or refinance loans.

The Federal Reserve, in a white paper to Congress earlier this month, said writedowns "had the potential to decrease the probability of default" and "improve migration between labor markets."

However, the Fed stopped short of endorsing such an initiative and noted concern that writing down loan balances would create a moral hazard - the concept that rescue efforts breed further behavior that exacerbates the existing problem - and could prompt other borrowers to stop making timely loan payments.


Fannie, Freddie writedowns too costly: regulator - Yahoo! Finance

Reply With Quote

Reply



futures io > > > > Fannie, Freddie writedowns too costly: regulator

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
California attorney general subpoenas Fannie, Freddie kbit News and Current Events 0 November 17th, 2011 10:56 PM
Fannie and Freddie, Still the Socialites kbit News and Current Events 0 October 17th, 2011 02:08 PM
US Taxpayers Paying Millions For Fannie, Freddie Lawsuits Quick Summary News and Current Events 0 January 24th, 2011 12:20 PM
Some Big Banks Want to Take Over Role of Fannie, Freddie Quick Summary News and Current Events 0 January 21st, 2011 03:20 PM
Cost of Seizing Fannie and Freddie Surges for Taxpayers Quick Summary News and Current Events 0 June 20th, 2010 09:30 AM


All times are GMT -4. The time now is 06:55 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-16 in 0.07 seconds with 19 queries on phoenix via your IP 54.145.16.43