Freddie Mac Requests to Remove Stocks from European Union

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BRIEF-Freddie Mac announces pricing of $209 mln multifamily small balance …


Dec 9 Federal Home Loan Mortgage Corp:

* Freddie Mac announces pricing of $209 million multifamily
small balance loan securitization


* Freddie Mac – expects to guarantee about $209 million in
multifamily SB certificates, which are anticipated to settle on
or about December 22, 2016

Source text for Eikon:
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Beach Real Estate Professionals Team Joins Keller Williams in Bethany Beach

Realtor associates Chris Allen, Barbara Melone, Peggy Mullen, Barbara Carlson and Al DiOrio have formed the Beach Real Estate Professionals Team and have joined Keller Williams Realty in the Delaware Beaches Market Center at 33012 Coastal Highway in Bethany Beach.

“We are excited to welcome the Beach Real Estate Professionals Team to the Keller Williams family,” says Brigit Taylor, Keller Williams team leader. “This company succeeds through its people, and adding this group to our team is a huge win for us. Each of these associates has a proven track record of top production, and now their combined efforts and nearly 100 years of experience will surely bring a higher level of service and excellence to their clients. This team is made up of five extraordinary individuals, and they are well on their way to building more wealth for themselves through the training and education and use of the systems and models in place.”

The Beach Real Estate Professionals Team will be specializing in the listing and sales of residential and vacation homes and investment properties as well as land sales in the surrounding areas. They are active members of the National Association of Realtors, Delaware Association of Realtors, Sussex County Association of Realtors, and a few are also members of the Coastal Association of Realtors.

“We joined Keller Williams Realty to be part of an organization of many accomplished agents. The technology and education is an advantage for us, but also for our clients, whether buying or selling,” said team leader Chris Allen. “It is refreshing to be part of an organization that is less focused on the branding of the company and more focused on positioning the agent for success, realizing that successful agents lead to a successful company.”

Keller Williams Realty has three offices in the Delaware resort area – 18344 Coastal Highway, Lewes; 33012 Coastal Highway, Bethany Beach; and 37458 Lion Drive, Fenwick Plaza (on Route 54), West Fenwick. Sales associates also work from two offices at Sea Colony – The Marketplace shopping center and Edgewater House lobby on the oceanfront.

For more information on being with a real estate organization specializing in training and consulting Realtors to be successful business owners, contact Brigit Taylor, 302-500-0750 or Brigit@brigittaylor.com. For more information about Keller Williams Realty, call Brigit Taylor at 302-360-0300, email Brigit@brigittaylor.com or go to www.kw.com.

Needham resident appointed Massachusetts Association of Realtors VP

William Dermody, a real estate agent with Century 21 Commonwealth in Needham, recently was appointed vice president of legal affairs and member benefits for the Massachusetts Association of Realtors for 2017.
In his role, Dermody will be responsible for coordinating the initiatives of the MAR Business Plan relative to the association’s professional standards and legal services; as well as those initiatives that relate to research and member benefits, standard forms and the association’s electronic information services.
He will also act as a liaison between leadership and all MAR work groups formed under legal affairs and member benefits. He automatically becomes a member of the MAR executive committee and board of directors as a result of his appointment as a focus area vice president.
A member of the MAR board of directors since 2007, Dermody served as the communications and technology vice president in 2014. He has served on several committees and work groups over the years, including acting as chair of the professional development committee in 2015.
Dermody is currently a member of the finance and government affairs committees.
On a local level, Dermody was the 2012 president of the Greater Boston Association of Realtors.
At the national level, Dermody serves on the National Association of Realtors board of directors and member communications committee and has for several years. He will serve on the NAR Professional Development Committee in 2017.
A real estate agent since 1995, Dermody has earned his Certified Residential Broker professional designation.
For information: marealtor.com.

Bill Ackman Comments on Fannie Mae and Freddie Mac

– By Holly LaFon

Fannie (FNMA) and Freddie (FMCC)’s underlying earnings continue to progress modestly in the core mortgage guarantee business, while the non-core investment portfolio continues to shrink to a smaller and appropriate level, resulting in a more profitable and lower-risk business model. The strength in underlying earnings growth reflects two factors: (1) an increase in guarantee fees as the fees on new mortgages exceed the average fees on the existing portfolio, and (2) lower credit losses as the portfolio’s credit quality has meaningfully improved since the financial crisis.

There were a number of legal developments this quarter. In the Federal Court of Claims case, Judge Sweeney granted the plaintiffs access to 56 documents the government had claimed were privileged, many of which were contemporaneous with the period just prior to the Net Worth Sweep and involved high level government officials. The plaintiffs have not yet had access to the privileged documents as the government has appealed Judge Sweeney’s ruling. We find it interesting that the government is fighting so hard against this ruling, as it has previously complied with the judge’s prior motions to turn over documents.

A new lawsuit was filed in Texas that makes claims similar to the Perry case, but also makes several new arguments. First, the lawsuit argues that the Housing and Economic Recovery Act (HERA), which grants FHFA rights as conservator, is invalid and violates the separation of powers. Second, the lawsuit contends that the FHFA has affected a liquidation of the GSEs in violation of HERA by creating policies such as a common securitization platform and credit risk transfer agreements which are designed to minimize the GSEs role in the marketplace.

Since the election, Fannie and Freddie’s share prices have appreciated materially as investors believe that a more business-oriented administration that did not implement the Net Worth Sweep would be more likely to seek a consensual resolution that benefits all stakeholders. Recent statements by Steven Mnuchin, the presumptive Treasury Secretary, have also contributed to the recent stock price increases. In an interview on Fox Business, Mr. Mnuchin stated:

It makes no sense that [the GSEs] are owned by the government and have been controlled by the government for as long as they have. In many cases this displaces private lending in the mortgage markets and we need these entities that will be safe. So let me just be clear– we’ll make sure that when they’re restructured they’re absolutely safe and they don’t get taken over again. But we gotta get them out of government control.

We strongly agree with Mr. Mnuchin’s views about the GSEs.

From Bill Ackman (Trades, Portfolio)’s Pershing Square third-quarter shareholder letter.
This article first appeared on GuruFocus.

Fannie Mae Prices $796.7 Million Multifamily DUS REMIC (FNA 2016-M13) Under Its GeMS Program

WASHINGTON, Dec. 9, 2016 /PRNewswire/ — Fannie Mae (OTC Bulletin Board: FNMA) priced its eleventh Multifamily (DUS®) REMIC in 2016 totaling $796.7 million under its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS™) program on December 7, 2016.

“M13 caps off a great year of GeMS issuance – $10.5 billion in new issue bonds placed to more than one hundred institutional investors across eleven deals,” said Josh Seiff, Fannie Mae’s Vice President of Capital Markets and Trading. “The GeMS program complements trading in the Fannie Mae DUS program, through which investors have purchased more than $50 billion in multifamily MBS this year. As 2016 comes to a close, we want to express our appreciation to the network of broker/dealers and investors whose support has helped make this a great year for the Multifamily MBS market and the GeMS program.”

All classes of FNA 2016-M13 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal. The structure details for the multi-tranche offering are in the table below:

 

 

For additional information, please refer to the Fannie Mae GeMS REMIC Term Sheet (FNA 2016-M13) available on the Fannie Mae GeMS Archive page on www.fanniemae.com.

Certain statements in this release may be considered forward-looking statements within the meaning of federal securities laws. In addition, not all securities will have the characteristics discussed in this release. Before investing in any Fannie Mae issued security, you should read the prospectus and prospectus supplement pursuant to which such security is offered. You should also read our most current Annual Report on Form 10-K and our reports on Form 10-Q and Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) available on the Investor Relations page of our Web site at www.fanniemae.com and on the SEC’s Web site at www.sec.gov.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/fannie-mae-prices-7967-million-multifamily-dus-remic-fna-2016-m13-under-its-gems-program-300376106.html

Moody’s: Privatizing Fannie Mae, Freddie Mac would cost "hundreds of billions"

Long an idea left idling amid Congressional wrangling and governmental malaise, releasing Fannie Mae and Freddie Mac from conservatorship became a distinct and real possibility recently when Steve Mnuchin, President-elect Donald Trump’s choice to lead the Department of the Treasury, said that “getting Fannie and Freddie out of government ownership” is one of the Trump administration’s top 10 priorities.

Mnuchin’s proclamation sent the stocks of Fannie and Freddie soaring to heights not seen in two years, as investors bet that Mnuchin’s words would soon become a reality.

But just how realistic is privatizing Fannie and Freddie, in whatever form the Trump administration plans? And what will it take to get there?

According to a new report from Moody’s Investors Service, privatizing the GSEs is not only unlikely to happen any time soon, it’s also hugely cost-prohibitive, and it would be a negative for bond investors as well.

Other than that, Mrs. Lincoln, how was the show?

As Moody’s notes, the capital buffers of each Fannie and Freddie are set to be drawn down over the next few years, from $1.2 billion in 2016, down to $600 million in 2017, and eventually to $0 in 2018.

That drawdown is part of the government’s preferred stock purchase agreement with the GSEs, which allows for the GSEs to take an additional draw from the Treasury if needed, but also sends all of the enterprises’ profits to the Treasury.

But for the enterprises to be removed from their current state of conservatorship, each of the GSEs would need a massive capital buffer to ensure the continued fluidity of the mortgage market.

If the GSEs were to continue to support the mortgage market as they do today, in order for privatization to work, each would need a strong capital base that likely totals in the “hundreds of billions of dollars,” Moody’s says in its report.

One of the issues with rebuilding that capital base is the amount of debt that each of the GSEs holds.

“Privatization would be credit negative for the GSEs because it increases the risk of funding disruptions owing to the many questions about how privatization would occur given the amount of debt the GSEs must refinance,” Moody’s analyst Brian Harris writes in the report.” And, confidence in (the GSEs’) financial standing would be critical given the need to refinance their debts during any transition to becoming a private company.”

According to the Moody’s report, Fannie Mae’s outstanding debt totaled $351.6 billion as of third quarter of 2016, while Freddie Mac’s was $378.1 billion.

Additionally, Fannie Mae had $51.4 billion of discount notes outstanding as of the end of the third quarter of 2016, while Freddie Mac had $69.3 billion outstanding during the same time period.

The GSEs also have $4.6 trillion of mortgage-backed securities outstanding, which is close to 25% of the nation’s gross domestic product.

“Disruptions in their ability to issue debt, materially higher debt issuing costs or a decline in mortgage-backed securities pricing would negatively affect US housing and the US economy,” Harris writes.

“Although GSE reform could take many directions, we believe the likely path will include government support for the senior debt issued by the companies before the implementation of reform through final maturity, and expect the effective substitution of the US sovereign rating for these obligations to continue,” Harris writes. “Nevertheless, there are alternative reform outcomes that would be less creditor friendly, as well as many variables that could change the path of reform, making the ultimate outcome highly uncertain.”

Also a consideration is the likely reluctance of Federal Housing Finance Agency Director Mel Watt to support ending conservatorship.

“Mr. Watt has given no indication that he believes the GSEs are healthy enough to end conservatorship. Plus, it is unclear how affordable housing mandates would work under privatized GSEs,” Harris writes. “Mr. Watt’s five-year term as FHFA director is not subject to affirmation by the incoming administration and runs through 2019, which would allow him to slow down any privatization effort.”

Given all of those factors, Harris suggests that GSE reform isn’t likely to take place in the first year of Trump’s term and perhaps even beyond that.

“Although we recognize this overall uncertainty, we also believe that any change in the GSEs’ current setup is unlikely to occur during our rating outlook horizon of the next 12-18 months, and thus we have a stable rating outlook,” Harris writes. “Despite Mr. Mnuchin’s comments, we believe that there is a very low probability that the GSEs will be privatized over the next few years given their capital needs and complexities of privatization.”

BRIEF-Freddie Mac says implemented common securitization platform (CSP) fo…


UPDATE 1-New York, New Jersey 10-yr transport plan could include rail tunnel

Jersey City, N.J., Dec 8 The Port Authority of
New York and New Jersey said for the first time on Thursday its
next 10-year capital plan may include $2.7 billion for Amtrak’s
Gateway rail tunnel project underneath the Hudson River.

Freddie Mac takes next step to single securitization

As promised, Freddie Mac implemented Release 1, the next step towards single securitization, according to the Federal Housing Finance Agency.

Release 1 of the Common Securitization Platform was implemented on November 21, and announced today. Freddie Mac is now using CSP for data acceptance, issuance support and bond administration activities released to current single-class, fixed-rate, mortgage backed securities.

This development paves the way for Release 2, which will enable a combined Freddie Mac and Fannie Mae $3.5 trillion market of mortgage backed securities. The single security is a joint initiative from Fannie and Freddie to develop a single mortgage-backed security that will be issued by the government-sponsored enterprises to finance fixed-rate mortgage loans backed by one- to four-unit single-family properties.

Last year, the FHFA revealed a detailed look at the project’s timeline for implementation, stating, at the time, that it planned to release a more detailed update on the implementation of the single security this year.

Earlier this year, the FHFA announced that Freddie Mac would take the first step in the fourth quarter of this year, and Fannie Mae would follow. The FHFA said that it anticipates the full implementation of Release 2 to be completed in 2018.

The second phase of the rollout, Release 2, will see both GSEs begin to use the data acceptance, issuance support, disclosure and bond administration modules to perform activities related to their current fixed-rate securities, both single- and multi-class; to issue Single Securities, including commingled resecuritizations; and to perform activities related to the underlying loans.

For now, Freddie Mac’s implementation of Release 1 demonstrates that the system, operations and controls of the CSP and Common Securitization Solutions, which is working with the GSEs to implement the new market, are functional.

“The successful implementation of Release 1 is a significant milestone toward the ultimate goal of a common securitization platform and a single security,” FHFA Director Melvin Watt said.

The FHFA expects to release a timeline for the implementation of Release 2 during the first quarter of 2017.

“FHFA has developed a timeline of key achievements to date and will update the timeline as milestones are reached.  We remain committed to building the CSP in a transparent manner,” Watt said.

Freddie Mac expressed its excitement over the implementation and acknowledged the work it took to get to this point.

“We’re excited to use CSS operations and the CSP to support our securities issuance,” said David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “This is a milestone marking several years of intensive work across Freddie Mac, Fannie Mae, CSS and FHFA to take this project from concept to reality.”

“I’m very appreciative of the collaboration and drive exhibited by everyone working on this project,” Lowman said. “This is one of the ways we’re working together to build a better Freddie Mac and a better housing finance system for families, customers and taxpayers.”

Fannie Mae also joined in, giving its congratulations and looking ahead to the implementation to Release 2.

“Fannie Mae congratulates Common Securitization Solutions and Freddie Mac on Release 1 of the Common Securitization Platform and looks forward to continuing work on Release 2 to facilitate a smooth and transparent transition to the Single Security,” said Rick Sorkin, Fannie Mae senior vice president of securitization and capital markets.

Mortgage rates soar to fresh 2016 high, Freddie Mac says

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Rates for home loans rose for the sixth week in a row, mortgage finance provider Freddie Mac said Thursday.

The 30-year fixed-rate mortgage averaged 4.13% in the Dec. 8 week, up five basis points during the week. The 15-year fixed-rate mortgage averaged 3.36%, up from 3.34% in the prior week. Both are at 2016 highs.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.17%, up two basis points.

Mortgage rates loosely track the benchmark 10-Year Treasury yield

TMUBMUSD10Y, +0.81%

but move more slowly and within a narrower range. The 10-year slipped this week following the release of the Labor Department’s job openings report, but mortgage rates kept climbing, Freddie noted in a release.