National Association of Realtors to Zillow: Don’t come to our events

Zillow has been banned from NAR events. Photo: Shutterstock
Zillow has been banned from events hosted by the National Assocation of Realtors. Photo: Shutterstock

The National Association of Realtors has a blunt message for Zillow Group, the country’s leading online real estate portal: Don’t bother participating in any NAR events this year.

As reported by the real estate news site Inman, the NAR has decided to ban Seattle-based Zillow from exhibiting or sponsoring the organization’s events this year.

“It’s unfortunate that NAR felt it necessary to deny our application to exhibit at their 2016 events,” a Zillow spokeswoman said in a statement emailed to GeekWire. “We look forward to seeing all our industry partners at one of our many upcoming Zillow Group events.”

The NAR, along with its partner Move Inc., are currently locked in a bitter — and costly — legal battle with Zillow. The case centers around the hiring by Zillow of two former Move employees, Curt Beardsley and Errol Samuelson.

Curt Beardsley of Zillow at a recent court hearing.
Curt Beardsley of Zillow at a recent court hearing.

Move sued Zillow and Samuelson in March 2014, just 12 days after Samuelson joined Seattle-based Zillow. A King County Superior Court Judge later barred Samuelson from performing many of his key duties as Zillow’s Chief Industry Development Officer, sidelining the exec for a year.  Move later sued Beardsley in December 2014, alleging that the former Move executive destroyed key documents on his way out the door to Zillow.

Earlier this month, a King County Superior Court Judge denied Move Inc.’s motion for sanctions against its real estate rival Zillow after a lengthy hearing on allegations that two former Move executives hired by Zillow purposefully destroyed evidence in the case. However, citing the actions of Zillow executive Beardsley, the judge granted Move a jury instruction that will allow the jury to infer that “the missing evidence would have benefitted plaintiffs’ case or alternatively hurt the defendant’s [case.]”

The National Association of Realtors represents more than 1.1 million real estate brokers, appraisers and property managers, key customers of Zillow which sells advertising and other services to the real estate community. The organization hosts regular events for the real estate community, including a mid-year meeting earlier this month where Zillow was prevented from participating.

The NAR’s big Realtors Conference Expo will be held in Orlando in November, with the event featuring speakers such as former general Colin Powell and activities at Universal Studios.

Forensic Accounting Confirmed By Discovery

Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are two companies that produce by some estimates around $15B of profit per annum that become government revenue on a quarterly basis under The Housing and Economic Recovery Act of 2008 ((HERA)). The Federal Housing Finance Agency (FHFA) has entered into agreements and amendments on behalf of the companies Fannie and Freddie that will leave them without capital. The plaintiffs are arguing that the FHFA did not follow the law. Take a look at the actual law for yourself and consider whether or not an agreement that sweeps the net worth of the enterprises is consistent with the powers given to FHFA as conservator by the statute:

Click to enlarge

Investment Opportunity: Fannie Mae and Freddie Mac were both Fortune 50 companies with multi-billion dollar market capitalizations years before the government started taking all of their money under the guise of conservatorship. In the event that they are able to exit conservatorship and keep part of the money that they make, shareholders stand to gain from the current multi-bagger potential. On the upside, FHFA continues to remain in charge and continues to take all of the money away from shareholders. As such, to protect myself, I mostly own preferred shares. That said, if part of the legal outcome is that FHFA decides to follow the spirit of the law, maybe I should have been in commons.

MDL Circumstances And Threading The Eye Of The Needle

Thursday, oral arguments were heard with respect to whether or not several plaintiff lawsuits will be consolidated. To completely avoid the risk of being consolidated, the Jacobs/Hindes Delaware lawsuit has now dropped 80% of their counts. Instead of 10, now they are looking to follow through with just two:

Click to enlarge

They’re dropping all claims that could be considered similar to the other lawsuits and only focusing on Delaware corporate law. Much like in a game of poker, the government has bluffed and gotten Jacobs/Hindes to fold this round simply out of the desire to limit any risk to some sort of Lamberth style decision in the MDL arena. Smart play.

My research suggests that dropping 8 of the counts probably wasn’t necessary but certainly falls under the umbrella of playing it safe in a situation where the government is taking full advantage of their difference and are trying to leverage Judge Lamberth’s initial dismissal. Therefore, I am positioned and I am betting with exceedingly high confidence the MDL consolidation fails.

Further, this shows how strongly Delaware plaintiffs feel with regard to their key arguments if they’re willing to bet their entire case on them and them alone.

Judge Sweeney Wants To See What Government Is Hiding

Judge Sweeney most recently chided the government when she released documents for the Perry Capital Appeal Oral Arguments. Lawyers representing the plaintiffs were on a call recently that mentioned Investors Unite set up a repository for newly released documents fanniefreddiesecrets.org. On the call, lawyers stated that we should expect a ruling on the Perry Appeal sometime late June or early July. That’s around the time we should expect a ruling from Kentucky on the motion to dismiss assuming the MDL folds as I expect it will.

Judge Sweeney isn’t providing the government with much wiggle room:

The government’s motion was denied in part as they are being forced to produce for Judge Sweeney, and soon. It will be interesting to see how they attempt to hide these documents from the public going forward and who all is going to sign affidavits especially when the veil of secrecy is already failing.

Forensic Accounting Confirmed By Discovery

One of the common themes across the more recent lawsuits is specific concerns related to FHFA’s accounting policies surrounding the GSE conservatorships:

Wall Street On Parade seemed to miss the point that the accounting fraud that we are talking about is the one of FHFA writing down assets in order to cause Treasury draws in order to make Fannie Mae and Freddie Mac insolvent in order to justify the takeover and conservatorship.

There are now lawsuits against Deloitte and PwC with respect to their work done on the GSEs while the GSEs were being run by FHFA. Recently released and soon to be released evidence confirming these forensic accounting accusations can be found on http://fanniefreddiesecrets.org/. I say soon to be released purely in anticipation of a positive ruling on the Plaintiff’s motion to compel resulting in the end of the most breathtaking assertion of privilege any lawyer has dreamed of. I figure we are within a month of having a mountain of evidence but the reality is that we already have more than we need. The cash doesn’t lie. Just look at the cash transfers since conservatorship has begun and tell me about how that can be justified given the conservatorship guidelines outlined above by law under “Powers as Conservator.”

Summary and Conclusion

Under normal circumstances, Fannie Mae and Freddie Mac, which are private companies according to the White House, would retain a portion of their earnings less taxes. These are not ordinary circumstances and recently a slew of documents have been released to the public demonstrably proving a handful of people have been hard at work covering up the reclassification of GSE profits as government revenue. The fact is that internal discussions forecasting the GSE golden years started a chain reaction of events that led to public statements about how bad the GSEs are and the taking of their profits by securing the net worth of the twins for FHFA’s sister agency US Treasury.

If you figure that the Treasury takes 80% of the companies and they recapitalize over time, common shares could reach as high as $20 according to Richard X. Bove and William Ackman at this level of G-Fees.

In the next week or so, we’ll learn whether or not FHFA’s tactic to consolidate the cases was successful or an epic failure as I believe it will be. Then again, they were able to use it to postpone, so maybe it’s a success by their definition if they see the net worth sweep imploding anyway.

I have 4050 shares of FMCCH, 9340 shares of FMCCP, 4442 shares of FMCCT, 5000 shares of FMCKP, 34461 shares of FNMFN, 5 shares of FNMFO and 25092 shares of FNMA. I own these shares because I believe that America is founded on the principle that you can fight the government to get back what they’ve taken from you just like we as Americans fought to take our freedom, cease to be a British colony and gradually become the United States of America that we are today. Happy Memorial Day Weekend.

Disclosure: I am/we are long FNMA,FMCCH,FMCCP,FMCCT,FMCKO,FMCKP,FNMFN,FNMFO.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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.

Who Are These Affordable Housing B Piece Buyers Freddie Mac Is Targeting?

Freddie Mac headquarters Freddie Mac headquarters

McLEAN, VA—Freddie Mac is no stranger to the process of creating new structures in order to bring in new institutional investors to the housing market. But with its latest offering it may have outdone itself by reaching a class of investor type that can be difficult accommodate.

To recap, earlier this week Freddie Mac debuted a new credit risk transfer offering that packages affordable housing mortgage loans to sell to private investors. It has just settled its first offering of $52 million of these notes, which the GSE is calling Multifamily Structured Credit Risk Debt, or SCR notes (pronounced as score).

SCR notes are structured almost exactly like Freddie Mac’s popular K-Certificate offerings through which traditional multifamily loans are sold. SCR notes also offer similar yields, in the mid teens, Victor Pa, VP of multifamily investments for Freddie Mac, tells GlobeSt.com.

Another Kind of B Piece Buyer

Because of the way the SCR note is structured, it is fair to compare its investors with the B piece buyers in Freddie Mac’s K-Certificate deals, Pa says.

But the overlap ends there. In short, it is unlikely that investors in the K-Certificates will migrate over to the SCR deals even though they technically could and even though SCR deals could be perceived to have lower risk by those that are familiar with these transactions.

Why? Partially because the two offerings do not offer any kind of significant diversification but largely because these affordable housing loans are backed by state and local and federal tax credit programs, which are very complex and require special expertise to understand.

“Investors familiar with this space know because of that subsidy these loans will preform down the road,” Pa said.

A Private Equity Fund With A Social Mandate

These investors tend to be private equity funds with some kind of social responsibility investing mandate and are familiar with the tax credit ecosystem, Pa said. One example is Lake Forest, IL-based Systima Capital Management, which participated in the offering that Freddie Mac just brought to market. Systima describes itself as investment management firm focused on debt and equity investments in specialized housing, mortgage, and other real asset markets.

Pa estimates there are about a dozen or so institutional investors that fit this description.
Which is just as well, because the deal flow in this very specific space is also limited. All told, Freddie Mac expects it will do between $1 billion to $2 billion of SCR transactions a year.  And already demand is very strong among these investors, Pa said. “We have had inquiries about offering something like this and since we announced the program we’ve been getting a lot of calls.”

Freddie Mac Prices $1.3 Billion Multifamily K-Deal Backed by Properties Controlled by Starwood Capital Group

MCLEAN, VA–(Marketwired – May 27, 2016) – Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.3 billion in K Certificates (K-SW1 Certificates), which are backed by 25 properties indirectly controlled by Starwood Capital Group. The K-SW1 Certificates are expected to settle on or about June 8, 2016.

K-SW1 Pricing

Class
 
Principal/Notional Amount (mm)
 
Weighted Average Life (Years)
 
Discounted Margin
 
Coupon
 
Yield
 
Dollar Price
A
 
$1,269.589
 
9.44
 
58
 
1 mo LIBOR + 58
 
0.98199%
 
$100.00
X
 
$1,410.655
 
2.60
 
Non-Offered

Details

  • Co-Lead Managers and Joint Bookrunners: Wells Fargo Securities, LLC and Goldman Sachs and Co.
  • Co-Managers: Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner Smith Incorporated, Morgan Stanley Co. LLC and The Williams Capital Group, L.P.

Related Links

The K-SW1 Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-SW1 Certificates are backed by corresponding classes issued by the FREMF 2016-KSW1 Mortgage Trust (K-SW1 Trust) and are guaranteed by Freddie Mac. The K-SW1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-SW1 Certificates. The K-SW1 Trust Class B, C and R Certificates will not be guaranteed by Freddie Mac.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

This announcement is not an offer to sell any Freddie Mac or other issuer’s 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, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; 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, 2015, 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, 2015, 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 one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Freddie Mac Exceeds Portfolio Reduction Goal

Freddie Mac BHFreddie Mac reported that it has already exceeded the 2016 goal for reducing its mortgage-related investments portfolio only a third of the way through the month, according to Freddie Mac’s April 2016 Monthly Volume Summary released this week.

The mortgage-related investments portfolio for Freddie Mac contracted at an annual rate of 22.4 percent in April (which calculates to an over-the-month decline of about $6.4 billion). The contraction left the aggregate unpaid principal balance of the portfolio at $333.5 billion as of the end of April, which is nearly $6 billion lower than the 2016 cap of $339.3 billion, which is the amount the portfolio must reach by the end of the year as part of its required reduction. Freddie Mac’s fellow GSE, Fannie Mae, met its year-end goal for reducing its mortgage portfolio last month.

The value of Freddie Mac’s mortgage-related investments portfolio has declined by approximately $72 billion since the end of March 2015, when the aggregate UPB of the portfolio was $405.6 billion. For the first four months of 2015, the portfolio has contracted at an average rate of 11.6 percent and has contracted in all but two of the last 13 months (December and January).

Freddie Mac’s single-family refinance-loan purchase and guarantee volume for April was $14.9 billion, which represented 57 percent of total single-family mortgage portfolio purchases or issuances during the month. Relief refinance mortgages comprised about 8 percent of Freddie Mac’s total single-family refinance volume in April. The serious delinquency rate on mortgages backed by Freddie Mac declined by another 5 basis points from March to April, down to 1.15 percent.

The number of loan modifications completed on Freddie Mac-backed loans totaled 3,687 in April, which brings the year-to-date total (as of April 30) up to 14,597.

Freddie Mac reported a net loss of $354 million in the first quarter, which was its second in the last three quarters. The reduction of the mortgage portfolio and the wind-down of the GSEs’ capital buffer, which is required to be at zero by January 1, 2018, is likely to result in more calls for GSE reform as the Obama Administration draws to a close.

5-27 Freddie Mac graphic

 

Click here to view the complete April Monthly Volume Summary.

National Association of Realtors bans Zillow from 2016 events

 Errol Samuelson , a NTA conference and Cameron Paine

Errol Samuelson , a NTA conference and Cameron Paine

Zillow was conspicuously absent at the National Association of Realtors’ (NAR’s) midyear conference last week. And that was for a good reason: they weren’t allowed to come.

At the event, MLS CEO Cameron Paine asked the crowd why News Corp.-owned realtor.com operator Move Inc. was pitching its products to NAR members, while Zillow and homes.com were not?

The answer turned out to be that Zillow Group and its companies have been banned from NAR’s 2016 events, according to Inman. That includes its Association Executives Institute, the midyear legislative conference and the annual conference in November.

NAR and Move are co-plaintiffs in a legal battle against Zillow and executives Errol Samuelson and Curt Beardsley. Samuelson and Beardsley are accused of deleting e-mails, smashing a hard drive and wiping computers clean before decamping from Move to Zillow in order to hide evidence of swiping trade secrets.

A Washington state judge ruled against Zillow executive Curt Beardsley last week, but declined to sanction Samuelson or Zillow itself.

“In light of the ongoing litigation, we elected not to permit Zillow to exhibit at or sponsor NAR’s meetings this year,” NAR spokeswoman Sara Wiskerchen told Inman.

She added that “no funds were ever exchanged” between Zillow and NAR for that event, contradicting a rumor that said funds had been returned to Zillow.

“It’s unfortunate that NAR felt it necessary to deny our application to exhibit at their 2016 events. We look forward to seeing all of our industry partners at one of our many upcoming Zillow Group events,” Zillow Group spokeswoman Amanda Woolley told Inman. [Inman] Christopher Cameron

Goldman Sachs subsidiary just bought more non-performing loans from Fannie Mae

For the third time in 2016, MTGLQ Investors, L.P., a “significant subsidiary” of Goldman Sachs is the winning bidder for a pool of non-performing loans from Fannie Mae, pushing the amount of loans sold to MTGLQ Investors over $2 billion in 2016.

According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

MTGLQ Investors bought its first pool of NPLs from Fannie Mae in February. In that sale, MTGLQ Investors was the winning bidder for two pools of NPLs representing 2,068 loans that carry an unpaid principal balance of $418,414,683.

And earlier this month, MTGLQ Investors was the winning bidder of all four pools of an even larger sale, buying up 7,900 loans, which totaled $1.48 billion in unpaid principal balance.

Fannie Mae announced Thursday that as part of the sale from earlier this month, MTGLQ Investors bought another pool of non-performing loans.

The latest pool of NPLs for MTGLQ Investors includes 1,760 loans with an aggregate unpaid principal balance of $329,788,631.

With this latest NPL purchase, MTGLQ Investors has now purchased more than $2.2 billion in non-performing loans from Fannie Mae this year.

According to Fannie Mae, the loans carry an average loan size $187,380; a weighted average note rate 5.41%; a weighted average delinquency of 49 months; and a weighted average broker’s price opinion loan-to-value ratio of 83%.

Fannie Mae stated that sale price of the pool was in the low 70s as a percentage of unpaid principal balance.

Additionally, Fannie Mae announced that it selected the winning bidder in its third Community Impact Pool sale of non-performing loans.

Community Impact Pool sales are structured to attract diverse participation from non-profits, smaller investors and minority- and women-owned businesses.

According to Fannie Mae, the winning bidder was New Jersey Community Capital. Fannie Mae stated that NJCC purchased the loans through its affiliate, the Community Loan Fund of New Jersey.

The pool of loans purchased by New Jersey Community Capital includes 83 loans secured by properties located in the Miami, Florida area with an unpaid principal balance of approximately $19.7 million.

The average loan size on the pool is $237,672 and the average note rate is 5.07%.  The average delinquency of the loans is 51 months and the loans carry an average broker’s price opinion loan-to-value ratio of 105%.

The sale price for this pool was in the high 60s as a percentage of unpaid principal balance, Fannie Mae said.

New Jersey Community Capital was also the winning bidder for the previous two Community Impact Pool sales.

“We continue to seek buyers for our non-performing loans that will take actionable steps to help struggling homeowners avoid foreclosure and help stabilize neighborhoods,” said Joy Cianci, senior vice president, single-family credit portfolio management, Fannie Mae. “We actively work with non-profit organizations across the country to address the needs of borrowers in hard hit communities, and we are happy to award our Community Impact Pool to NJCC.”

Fannie Mae: Sweeney’s Latest Orders Pull the Curtain Back Even More on Sweep

Fannie Mae: Sweeney’s Latest Orders Pull the Curtain Back Even More on Sweep by Investors Unite

It looks like Judge Margaret Sweeney of the U.S. Court of Federal Claims wants to cut to the chase. This week, she issued an order affirming that she wants to review all documents the government has been trying to keep sealed up to this point in the litigation over the conservatorship of Fannie Mae and Freddie Mac, including those documents on which the government has invoked “presidential privilege.”

These and other documents she has ordered unsealed in the last ten days are posted at FannieFreddiesecrets.org. The 53 documents she made available to lawyers representing Arnetia Joyce Robinson, an individual investor who sued the government in Kentucky Federal District Court last October, provide the most stunning evidence to date that the government has been profoundly misleading in its stated rational for the Sweep. They also show the White House itself nudged Treasury to adopt the policy, motivated by a zealous antipathy for the government sponsored enterprise (GSEs) and in utter indifference to the law.

Fannie Mae – NYT

As reported on by Gretchen Morgenson in the New York Times, and plainly evident by reviewing the documents we have posted, the new revelations raise fresh questions about extra-legal maneuverings by top aides to President Obama in devising the Sweep. For example, a senior White House housing finance official, Jim Parrott, sent an email to senior officials at Treasury the day the Sweep was announced in August 2012, boasting that diverting Fannie’s and Freddie’s profits would eliminate “the possibility that they ever go (pretend) private again.” He heaped praise on his Administration colleagues for pulling off a “high risk exercise” that resulted in a policy that was a “credit to the Secretary and the President” and which was already well received by the “outside world (or the reasonable parts anyway).”

Among the “reasonable parts” in the White House’s world view was the conservative American Enterprise Institute, which is not a frequent collaborator with the Obama Administration. On this occasion, however, in an email to AEI’s Jim Wallison, Parrott playfully refers to himself as a “fellow traveler.” This is bound to draw the ire of actual Communists everywhere or at least make American progressives uncomfortable.

The first investor lawsuits likely began to materialize as soon as the audacious change the White House and Treasury engineered was understood.  By the way, Arnetia Robinson, a retired bank manager and loan officer, bought Fannie and Freddie shares in September 2008 to help fund her retirement. She apparently is part of the “unreasonable” part of the world in the Administration’s world view.

The close coordination between Treasury and the White House and the hubris on display puts officials in an awkward light. But Judge Sweeney made clear in unsealing seven documents last month that sparing public servants from embarrassment is not a reason to hide the operations of government from the public. Indeed, these recent revelations go to more serious issues at the heart of litigation over the Sweep – the rule of law and transparency in government.

When the conservatorship was established in 2008, it was to restore the GSEs’ health and release them. That is what the Housing and Economic Recovery Act said. Period. And yet, here in black and white is evidence of a cabal of officials at the White House and Treasury doing just the opposite. In addition, the GSEs’ designated conservator, the Federal Housing and Finance Agency, was apparently out of the loop in the policy pivot, even though HERA explicitly walled FHFA off from Treasury’s influence and control. On the eve of the announcement of the Sweep, Mario Ugoletti, then a senior FHFA official, sent colleagues an email indicating there were reports of a big change coming on the Preferred Stock Purchase Agreement. In essence, the Sweep originated outside the office of the conservator and apparently FHFA was simply to carry out orders.

To be sure, owning up to a misapplication of law is not something any Administration wants to do. That is why an alibi was offered up in court: The “death spiral” narrative. The government has claimed that the Sweep was needed to protect taxpayers from the “death spiral” of Fannie and Freddie’s finances. Documents released in April blew holes in that assertion and the documents unsealed May 11 completely obliterate it. Just weeks before the Sweep was announced, during a meeting of Fannie Mae executives, the next eight years were characterized as the “the golden years of GSE profitability.” “Death spiral” and “golden years” are about as antithetical as terminology gets.

The more we know about what was at work in the summer of 2012, the more the government’s secrecy makes sense – at least for the government. And that is why this saga is so troubling. As Morgenson commented, “The significance of these documents, however, goes well beyond the future of housing finance. They demonstrate the perils of allowing the government to act in secrecy. In asking for confidentiality surrounding its actions, the government argued that the release of such documents would roil the financial markets. What seems clearer all the time is that their release will instead help the public understand what the government did here and why.”

In our view, the law is not a Jackson Pollock painting, open to each viewer’s interpretation. It is supposed to be “faithfully executed” in the light of day for the “outside world” to see, regardless of whether a handful of government officials consider some segments of the public “reasonable.”

Fanniegate Fannie Mae  Freddie MacFanniegate Fannie Mae  Freddie Mac
Fannie Mae

Opinion Journal: Will Fannie Mae Ever Die?

1:59
 

Trump’s Game Plan: Put 15 States in Play

5/28/2016 6:00AM

Presumptive GOP nominee Donald Trump says he’s going to focus on 15 states to be competitive in the general election, including California, New York and others that Republicans usually concede. WSJ’s Shelby Holliday runs through the obstacles Trump will have to overcome.

Freddie Mac Prices $1.3 Billion Multifamily K-Deal Backed by Properties Controlled by Starwood Capital Group

MCLEAN, VA, May 27, 2016 (Marketwired via COMTEX) — MCLEAN, VA–(Marketwired – May 27, 2016) – Freddie Mac (otcqb:FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.3 billion in K Certificates (K-SW1 Certificates), which are backed by 25 properties indirectly controlled by Starwood Capital Group. The K-SW1 Certificates are expected to settle on or about June 8, 2016.

K-SW1 Pricing

Class   Principal/Notional Amount (mm)   Weighted Average Life (Years)   Discounted Margin   Coupon   Yield   Dollar Price A   $1,269.589   9.44   58   1 mo LIBOR + 58   0.98199%   $100.00 X   $1,410.655   2.60   Non-Offered 

Details

Co-Lead Managers and Joint Bookrunners: Wells Fargo Securities, LLC and Goldman Sachs and Co.

Co-Managers: Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner Smith Incorporated, Morgan Stanley Co. LLC and The Williams Capital Group, L.P.

Related Links

The K-SW1 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/ksw01oc.pdf

Freddie Mac Multifamily Investor Presentation

Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages

The K-SW1 Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-SW1 Certificates are backed by corresponding classes issued by the FREMF 2016-KSW1 Mortgage Trust (K-SW1 Trust) and are guaranteed by Freddie Mac. The K-SW1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-SW1 Certificates. The K-SW1 Trust Class B, C and R Certificates will not be guaranteed by Freddie Mac.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

This announcement is not an offer to sell any Freddie Mac or other issuer’s 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, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; 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, 2015, 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, 2015, 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 one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

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