Are U.S. adults buying more homes now that apartment rents are on the rise?
It doesn’t look like it. According to the latest research from Freddie Mac, most renters are staying with apartment living even as rents in cities across the country continue to creep higher.
“This contradicts what some in the housing makret think, as they expect more renters ought to be actively looking to purchase a home,” said David Brickman, executive vice president of Freddie Mac Multifamily, in a written statement. We believe rising rents are primarily a sign of increased demand rather than a signal that home home purchases will be increasing.”
Freddie Mac reports that apartment rents rose 3.6 percent in 2014 across the country and are expected to rise 3.4 percent above inflation this year. More than one-third of U.S. households now rent their homes, according to the U.S. Census Bureau.
Freddie Mac found that 38 percent of renters who have lived in their home two years or longer experienced a rent increase in the last two years. Only 6 percent saw a decrease in rents.
How happy are renters? A third of renters told Freddie Mac that they are very satisfied with their rental experience, while another 30 percent said that they are moderately satisfied.
And what do renters like most about renting? Freddie Mac found that they like the freedom from home maintenance, the greater flexibility over where they live and protection from declining home prices.
© 2015 Real Estate Communications Group. Duplication or reproduction of this article not permitted without authorization from the Real Estate Publishing Group. For information on reprint or electronic pdf of this article contact Mark Menzies at 312-644-4610 or firstname.lastname@example.org
SAN FRANCISCO–(BUSINESS WIRE)–August
has been selected by the National Association of Realtors’ (NAR)
strategic investment arm, Second
Century Ventures, to join its REach®
growth technology accelerator program.
Out of hundreds of applicants, August was chosen to join a select group
of eight companies, which span across home services, personal security,
real estate lending, and more. As a member of the REach program, August
will partner with both industry leaders and the most promising startups
to solve some of the most difficult challenges facing the industry and
NAR, the largest trade association in the U.S. with more than 1 million
“In today’s competitive housing market, we know realtors are
increasingly turning to technology to stand out from the crowd,” said
Jason Johnson, CEO and co-founder of August. “We hope that by working
with NAR and REach, together we can use August’s market leading home
access technology to add convenience and increase value for real estate
professionals. August has the potential to save brokers and agents
significant time by providing contractors, stagers and maintenance
workers with instant, keyless access that can even be tracked remotely.
We also believe that August will reduce cost and help property managers
become more efficient by eliminating expensive re-keying and reducing
late night lock-outs.”
This announcement comes fresh off the heels of August’s recently
announced national partnerships with Comcast and Best Buy. To learn more
about August, please visit: http://blog.august.com/.
August builds products for the home that make life simpler and more
secure. August’s flagship product, the August Smart Lock, is an
intelligent hardware, software and home access management system that
allows users to send time-restricted virtual keys to anyone with an iOS
or Android smartphone. Founded by technology entrepreneur Jason Johnson
and renowned designer Yves Béhar, August has raised $50 million in
funding to date and is headquartered in San Francisco, California.
More Americans than forecast signed contracts to purchase previously owned U.S. homes in April, indicating a pickup in the housing market during the busy spring selling period.
The index of pending home resales climbed 3.4 percent to the highest level in nine years after a revised 1.2 percent gain the prior month, the National Association of Realtors said Thursday in Washington. The median forecast of 39 economists surveyed by Bloomberg called for an increase of 0.9 percent.
Steady hiring, easier credit availability and borrowing costs still close to historically low levels are providing a boost to the market. The report follows data on new-home sales and housing starts that show a pickup in residential real estate will contribute to economic growth.
“Realtors are saying foot traffic remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas,” NAR chief economist Lawrence Yun said in a statement. “Homeowners looking to sell this spring appear to be in the driver’s seat.”
Estimates in the Bloomberg survey ranged from a drop of 3.7 percent to a rise of 3 percent. The Realtors’ group revised the March data from a previously reported gain of 1.1 percent.
All four regions saw an increase, the report showed. Sales advanced 10.1 percent in the Northeast, 5 percent in the Midwest, 2.3 percent in the South and 0.1 percent in the West.
Compared with a year earlier, the index increased 13.4 percent on an unadjusted basis, after a 13.5 percent gain in the prior 12-month period. They were projected to climb 10.9 percent, according to the Bloomberg survey median.
The pending sales gauge was 112.4 on a seasonally adjusted basis, the highest since May 2006, the Realtors group said. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.
Economists consider pending sales a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a deal closes, typically a month or two later.
Those resales, which make up more than 90 percent of the housing market, dropped 3.3 percent to a 5.04 million annualized rate in April after a 5.21 million pace that was the strongest in almost two years, the Realtors group reported on May 21. The median price from a year earlier posted the biggest 12-month gain since January 2014 as the number of houses for sales fell from the same time last year.
A Commerce Department report showed new home sales jumped 6.8 percent last month to a 517,000 annualized pace, more than projected.
Housing-related businesses including PulteGroup Inc. and Home Depot Inc. have said the spring selling season is off to a good start. At Toll Brothers Inc., the largest U.S. luxury-home builder, lower tax provisions made up for a decline in revenue in the quarter ended April 30, helping to increase earnings.
“The housing market is on firm footing and heading in the right direction,” Chairman Robert Toll said in a May 27 statement. “As pent-up demand is released, we envision a gradual and elongated recovery for housing.”
Introducing Fannie Mae
The Federal National Mortgage Association (Fannie Mae) (OTCBB: OTCQB:FNMA) is a Government-sponsored enterprise (GSE) in the housing finance market. As a housing GSE, Fannie Mae is a federally chartered, shareholder-owned, private company with a public mission to provide stability in and to increase the liquidity of the residential mortgage market and to help increase the availability of mortgage credit to low- and moderate-income families and in underserved areas. Fannie Mae engages primarily in two forms of business: guaranteeing residential mortgage securities and investing in portfolios of residential mortgages.
Freddie Mac is remarkably similar to Fannie Mae, take a look.
Introducing Freddie Mac
The Federal Home Loan Mortgage Corporation (Freddie Mac) (OTCBB: OTCQB:FMCC) is a Government-sponsored enterprise (GSE) in the housing finance market. As a housing GSE, Freddie Mac is a federally chartered, shareholder-owned, private company with a public mission to provide stability in and increase the liquidity of the residential mortgage market, and to help increase the availability of mortgage credit to low- and moderate-income families and in underserved areas. Freddie Mac engages primarily in two forms of business: guaranteeing residential mortgage securities and investing in portfolios of residential mortgages.
If you’re not sure about the above, it’s worth noting that it’s straight out of the White House’s mouth.
The Investment Opportunity
Right now, Fannie and Freddie are operating in the context of conservatorship and the current capital structure that is actively being used to direct the profits of the companies sends them all to their Senior Preferred Shareholder, leaving nothing for Junior Preferred or Common Shareholders. If this structure remains in place, the shares are worthless. If things change, the upside is multiples of the current price. The appeals process is one reason that things might change and I think that there’s a really good chance even though the Iowa decision mirrored the Judge Royce Lamberth one and did not get appealed. The appeals process should be wrapping up later this year so I am figuring that this will get really interesting in Q4.
Lamberth’s Finger Pointing Quips
The best part of all of this begins with the end of Lamberth’s Memorandum Opinion where he finger points at Congress:
It is understandable for the Third Amendment, which sweeps nearly all GSE profits to Treasury, to raise eyebrows, or even engender a feeling of discomfort. But any sense of unease over the defendants’ conduct is not enough to overcome the plain meaning of HERA’s text. Here, the plaintiffs’ true gripe is with the language of a statute that enabled FHFA and, consequently, Treasury, to take unprecedented steps to salvage the largest players in the mortgage finance industry before their looming collapse triggered a systemic panic. Indeed, the plaintiffs’ grievance is really with Congress itself. It was Congress, after all, that parted the legal seas so that FHFA and Treasury could effectively do whatever they thought was needed to stabilize and, if necessary, liquidate, the GSEs. Recognizing its role in the constitutional system, this Court does not seek to evaluate the merits of whether the Third Amendment is sound financial–or even moral-policy.
Specific Counterpoints to Lamberth’s Memorandum Opinion
Overall it seems like Lamberth appears to employ the temporary luxury of selective reading. Below I’ve offered various counterpoints that make it pretty clear that Lamberth might have made a mistake.
- Lamberth: A provision of the Housing and Economic Recovery Act (HERA) provides in its role of conservator the FHFA succeeded to “all rights, titles, powers, and privileges of the regulated entity, and any stockholder, officer, or director.”
- Rebuttle: Taken literally, FHFA could at any point in the conservatorship process repatriate assets of any private company for nothing in exchange. Lamberth’s ruling effectively undermines the purpose of ownership of publicly traded companies. You can see how he couches this by saying he’s not evaluting the merits and then points at Congress. Lamberth’s position supports the view that the government can place any company into conservatorship, take all the assets, and then say no harm done.
- Lamberth: The plaintiffs cannot transform subjective, conclusory allegations into objective facts.
- Rebuttle: Lamberth’s ruling doesn’t accept the plaintiffs claim that the FHFA can only exercise as conservator the powers of conservator as outlined in 12 U.S. Code 4617(b)(NYSE:D) which says:
Powers as conservator
The Agency may, as conservator, take such action as may be-
(NYSE:I) necessary to put the regulated entity in a sound and solvent condition; and
(ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.
- Rebuttle continued: Nowhere in that section can you find anything that supports the first objective of “making sure that every dollar that Fannie Mae and Freddie Mac generate will be used to … “. You don’t conserve assets and property of a regulated entity by making sure that every dollar goes to U.S. Treasury. If that’s the logic, there’s no need for conservators to ever provide any benefit for their conservatees as long as they make sure every dollar goes to U.S. Treasury.
- Lamberth: Given that the class plaintiffs cannot repair the overarching threshold defect of having no cognizable property interest at stake, their takings claim must be dismissed under Rule 12(b)(6).
- Rebuttle: Lamberth’s claim that the class plaintiffs have no cognizable property interest at stake in the process of conservatorship has no merit as it violates the consideration of “the need to maintain the corporation’s status as a private shareholder-owned company” because private shareholder-owned companies would not remit 100% of their profits to the U.S. Treasury. For a private company, taxes are the name for monies remitted to U.S. Treasury, who is a tax collector. The corporate tax rate is 39.1%. Any company that is forced to remit 100% of what it makes to the government in perpetuity is not a private shareholder-owned company.
- Lamberth: FHFA’s dealings are within the law and that the court may not take any action as he interprets 12 USC 4617(f) which reads, “no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.”
- Rebuttle: Judge Sweeney has taken the perspective that at least for the purpose of the net worth sweep she needs to know whether or not FHFA was really acting independently or as an extension of U.S. ‘Treasury or whoever it was.’
- Lamberth: FHFA’s Justifications for Executing the Third Amendment and, Consequently, the Accompanying Administrative Record, Are Irrelevant for § 4617(f) Analysis.
- Rebuttle: Lamberth is wrong pursuant to 12 U.S. Code 4617(b) because taking actions that prevents the company from building capital are ‘not appropriate to carry on the business’ and are not ‘necessary to put the regulated entity in a sound and solvent condition.’ In fact, saying that FHFA’s justifications are not relevant means he might have missed that section. In addition, 12 U.S. Code 1719(g)(1)(C)(III) which says that Treasury should consider “[t]he corporation’s plan for the orderly resumption of private market funding or capital market access”. The Third Amendment, by precluding any return to the private market, is inconsistent with these provisions.
Charlie Harrison’s View
SA’s Charlie Harrison points out that the cases that Judge Lamberth cites require he be reversed on appeal. He demonstrates that the ninth and the eleventh circuit courts say judicial oversight applies in situations where the FHFA acts beyond statutory or constitutional bounds and that FHFA cannot evade judicial review and the APA’s requirements for rulemaking simply by invoking its authority as conservator, something that Judge Sweeney agrees with.
In addition, Charlie Harrison has also demonstrated that a Massachusetts decision also supports the shareholders.
The Upside on Lamberth Reversal
On a Lamberth reversal, the common shares are worth over $20 according to forecasts by Bill Ackman and Richard X. Bove as well as earnings estimates coming from Bruce Berkowitz. My view is that this is merely the next horse in the race and that a Lamberth reversal would be a near term catalyst and am looking forward to two of the Judges finding something in Lamberth’s interpretation of how the law works to justify the plaintiffs reasoning upon entering the appeals process and the legal process in general.
Mathematically, one can deduce the market weighted probability of an outcome. If one assumes that the outcome of a reversal is only $20 and the stock is currently at $2.62, that implies that the market gives a reversal through either the appeals process or claims court victory for plaintiffs at less than 13%. At this sort of valuation Fannie and Freddie are currently priced like cheap call options on the future profitability of the companies if you think as I do that the reversal of the net worth sweep is more likely than the perpetuation as a matter of law.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
Disclosure: The author is long FNMA. (More…)The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Freddie Mac (OTCQB: FMCC) announced today that it priced its new .75% two-year USD Reference Notes® security due on July 14, 2017. The issue, CUSIP number 3137EADV8, was priced at 99.922 to yield .787%, or 13.5 basis points more than two-year U.S. Treasury Notes. The issue will settle on Friday, May 29, 2015.
The new two-year Reference Notes security was offered via a syndicate of dealers headed by Barclays Capital, TD Securities USA LLC, and Nomura Securities, International, Inc. An application was made to list the issue on the Euro MTF market of the Luxembourg Stock Exchange.
This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (“SEC”) on February 19, 2015; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (‘Exchange Act”) since December 31, 2014, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information “furnished” to the SEC on Form 8-K.
Freddie Mac’s press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2014, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog.
Freddie Mac’s monthly Multi-Indicator Market Index showed almost 80% of the top 100 housing markets in the country continued to improve in March from February, the government-sponsored enterprise said Wednesday.
According to the index, 17 states as well as the District of Columbia had market values in a “stable” range, with North Dakota, D.C., Hawaii, Montana and Wyoming making up the top five most stable markets.
According to Freddie Mac, a total of 36 states and 77 of 100 metro area markets improved on a three-month trend in the most recent MiMi. Washington (2.37% improvement), Oregon (2.26%), Arizona (1.76%), Tennessee (1.39%) and Michigan (1.26%) were the states whose home values were most improved on a year-over-over basis. Stockton, Calif. (12.01%), Detroit (11.63%), Denver (11.41%), Las Vegas (10.73%) and Palm Bay, Fla. (10.23%), were the metro areas with the most improvement.
“The nation’s housing markets are getting back on track. Better employment prospects, rising home values and increased purchase activity are all driving improvements in housing markets across the country,” Freddie Mac deputy chief economist Len Kiefer said in a statement accompanying the index results.
“However, as we’ve mentioned before, we’re likely to see bouts of affordability shock with mortgage rate swings for the remainder of this year as market participants try to anticipate Fed timing around rising short-term interest rates and expectations for global growth wax and wane.”
Average fixed mortgage rates are moving higher amid positive housing data and pushing fixed mortgage rates to their highest level of the year, according to Freddie Mac.
The 30-year fixed-rate mortgage averaged 3.87% with an average 0.6 point for the week ending May 28, 2015, up from last week when it averaged 3.84%. A year ago at this time, the 30-year FRM averaged 4.12%.
“Mortgage rates rose to the highest level in 2015 following positive housing market data. New home sales surged 6.8% to an annual pace of 517,000 units in April,” said Len Kiefer, deputy chief economist at Freddie Mac.
“Although existing home sales slipped 3.3% to a seasonally-adjusted pace of 5.04 million units, sales are up 6.1% on a year-over-year basis. The SP/Case-Shiller 20-city home price index also posted a solid gain of 5% over the 12-months ending in March 2015,” he said.
The 15-year FRM this week averaged 3.11% with an average 0.5 point, up from last week when it averaged 3.05%. A year ago at this time, the 15-year FRM averaged 3.21%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.90% this week with an average 0.5 point, up from last week when it averaged 2.88%. A year ago, the 5-year ARM averaged 2.96%.
The 1-year Treasury-indexed ARM averaged 2.50% this week with an average 0.3 point, down from last week when it averaged 2.51precent. At this time last year, the 1-year ARM averaged 2.41%.
Sales of previously-owned homes fell by 3.3% in April on short inventory,with the housing market slowing everywhere but the Midwest. Tight supply helped drive prices higher: 40% of previously-owned homes sold in April went at or above the asking price.
Completed transactions of existing-homes (single-family homes, townhomes, condominiums and co-ops) fell to an annual, seasonally adjusted rate of 5.04 million in April, below March’s upwardly revised pace of 5.21 million, the National Association of Realtors said Thursday.
“April’s setback is the result of lagging supply relative to demand and the upward pressure it’s putting on prices,” said Lawrence Yun, NAR’s chief economist. “However, the overall data and feedback we’re hearing from realtors continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.”
Despite the slowed pace in April, sales have now increased on a year-over-year basis for seven straight months. Compared to one year earlier, April’s sales pace was up 6.1%.
As of the end of April, the supply of available housing for sale stood at 2.21 million existing-homes, 10% higher than the prior month but 0.9% lower than one year earlier. The current number of homes available for sale represents a 5.3-month supply at the current sales pace, up from a 4.6-month supply in March. Economists generally consider a 6-month supply a healthy market.
“Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace,” says Yun. “To put it in perspective, roughly 40% of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012.”
Properties sold, on average, within 39 days in April–a faster pace than in any month since July 2013 (42 days), and the second-shortest sales time since NAR began tracking this metric in May 2011. (June 2013 was fastest, at 37 days). Forty-six percent of homes sold in April were on the market less than a month.
First-time buyers remained at 30% of the buyer pool in April for the second straight month, up from 29% one year earlier. Economists have been watching that metric closely, speculating that high student debt, limited housing supply at the lower end of the market, and a less than robust job market have delayed younger people from purchasing homes. In March NAR released a study showing that the gap between rent and income growth is broadening across the nation, making it more difficult for renters to become homeowners.
Thirty members and guests of the Silicon Valley Association of Realtors attended “Doing Business with Mexico,” the second of a series of programs hosted by the local trade association’s Global Business Council. Real estate professionals shared valuable information on both inbound and outbound transactions involving the country, cultural differences and discounted several myths.
Panelists included Nancy MacLeod, real estate broker/owner of Homes2Buy.com, who owns a villa in San Miguel de Allende, where she also represents buyers from the U.S.; Alicia Sandoval, a Realtor with Keller Williams Realty in Palo Alto and native of Mexico; Amber Neil, a Realtor with No Borders Realty in San Jose, who has dual U.S. and Mexican citizenship; and Sal Covarrubias, sales manager for First American Title Company, who discussed title vesting concerns, proper identification needs for sellers and the differences in holding title between the U.S. and Mexico.
The California Association of Realtors’ 2014 International Home Buyers Survey found buyers from Mexico make up the third largest group of international buyers in California at 9.1 percent, after China (36 percent) and Canada (11 percent). According to the National Association of Realtors, Mexico has consistently been a top investor in U.S. real estate over the past 10 years. On the outbound investment side, Mexico is the No. 1 destination for Americans and baby-boomers that retire abroad, with over 1 million Americans residing there.
The best approach for Realtors seeking to tap into the Mexican market would be joining AMPI (Asociación Mexicana de Profesionales Inmobiliarios), the real estate trade organization in Mexico. Travel to Mexico and networking are key to learning more about the real estate business there and AMPI would be a good source, said the panelists.
“AMPI has ties with the National Association of Realtors and is strongly advocating for the licensing of real estate agents in Mexico. Right now, anyone can be a real estate agent there,” said Sandoval.
Neil added, “It is expensive and complicated to do business in Mexico. You need to have a visa and a work permit. It’s best to do business via referral, but make sure you are dealing with a reputable agent, preferably a member of AMPI.”
Covarrubias said issues regarding Mexicans buying property in the U.S. are similar to that of other foreign buyers. “Timing is important, and whether the foreign buyer will be personally present at closing. Also, agents need to verify their client’s legal name. It may not matter much when the client buys the house, but it will matter when it is time to sell the property,” said Covarrubias, adding title insurance in Mexico is not standardized like the U.S. American title insurance is needed for new construction, for example, while only Mexican title insurance can be used for a resale.
Real estate transactions can take months to conclude in Mexico, so when Mexicans buy U.S. property they are shocked when the process is quick and closing can be as soon as three or seven days. Also, there is no disclosure when buying property in Mexico, so Realtors need to take time to explain the transaction process to their Mexican buyers.
“Mexicans are very social and want to get to know you personally first before deciding to do business with you. They value social graces, mannerisms and respect,” said Neil, “and they are not keen on email or text. They want a one-on-one conversation with you, eye-to-eye, and many meetings.”
Like any country, there are places that are dangerous, but MacLeod attests, “Mexico is still very safe, especially the tourist areas and places like San Miguel de Allende.”
Sandoval said while payoffs were prevalent in the past, business there is now done in a more professional way.
Lastly, don’t believe you have to sign a 99-year lease and can’t own property in Mexico. “I’m not sure where that myth came from,” chuckled Neil.
Information is presented by the Silicon Valley Association of Realtors at silvar.org. Contact email@example.com.
Investment advisers and brokers in the Washington, D.C., area may be getting new business from current and former employees of a federal housing agency who must decide within the next week what to do with their retirement funds.
The Federal National Mortgage Association, or Fannie Mae, as well as the Federal Home Loan Mortgage Corp., or Freddie Mac, terminated their defined-benefit retirement programs at the end of 2013.
Fannie Mae gave current and former employees four options to reallocate their retirement funds — lump-sum distribution, an annuity, the Fannie Mae 401(k) plan or an individual retirement account. The window for moving assets opened on April 21 and will close on June 4, according to Scott Puritz, managing director of Rebalance IRA, an investment advisory firm based in Bethesda, Md.
“This is one of the most important economic decisions they can make in their lives, and they have to do it in a short amount of time,” said Mr. Puritz, who has counseled current and former Fannie Mae workers.
Mr. Puritz estimates that thousands of people are deciding what to do with their Fannie Mae retirement funds and their assets total approximately $1.4 billion.
As of the end of January, Fannie Mae had 7,600 employees. But its defined-benefit pension plan had been closed to new entrants in 2011.
“We have provided resources and support to help our employees make informed decisions about how to receive their benefit payments,” Andrew Wilson, Fannie Mae senior director of media and external relations, wrote in an email. “Fannie Mae continues to offer a cost-effective and competitive retirement program for our employees.”
Mr. Wilson did not respond to questions about the number of Fannie Mae workers and retirees affected or the total amount of retirement assets that they hold.
Advisers such as Mr. Puritz are working with the Fannie Mae community at a tense time.
The biggest challenge “first of all, is calming them down, making people feel at ease,” he said.
Mr. Puritz tries to steer most Fannie Mae employees away from annuities.
“It quickly becomes a no-brainer that that is not a good choice,” he said. “People are not understanding what an annuity is.”
Mr. Puritz acknowledged that his firm stands to benefit if Fannie Mae employees take a lump sum and invest it with guidance from his company. But, he argued that that is the best route for most of them.
“A large part of what we do is educate people,” he said.