May 7, 2016
Gigantic government's complexity and opacity provide innumerable opportunities for opportunists to act unconstrained by clear law or effective supervision. Today's example, involving the government's expropriation of hundreds of billions of dollars, features three sets of unsympathetic actors - a grasping federal government, a few hedge funds nimble at exploiting the commingling of government and the private sector, and two anomalous institutions that should never have existed. The two are the "government-sponsored enterprises" (GSEs)
January 13, 2016
By Josh Rosner T he Big Short , the screen adaptation of Michael Lewis' book on the 2008 financial crisis, has reopened the debate about what caused and exacerbated the catastrophic collapse. Some commentators continue to assert that the crisis was entirely the fault of Fannie Mae and Freddie Mac, but that claim just doesn't hold up. Here's what happened. In the mid-1990s, after weak legislative reform of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, these firms - supported by government efforts to expand homeownership - began to subordinate their historic and effective public roles as countercyclical providers of liquidity to the mortgage market and to place profit growth ahead of their utility mission.
January 13, 2016
By Peter J. Wallison We can all agree that the financial crisis was caused by a "mortgage meltdown" mostly among subprime and other risky mortgages. But what neither The Big Short nor its greed narrative tells us is why there were so many of these mortgages in the financial system to begin with. The answer: It was not Wall Street. In June 2008, just before the crisis, more than half of all U.S. mortgages - 31 million loans - were subprime or otherwise risky. Of these, 76 percent were on the books of government agencies, primarily the government-sponsored enterprises (GSEs)
January 8, 2016
In the Region DNCC picks convention insurers The Democratic National Convention Committee (DNCC) announced Thursday that it had selected a Maryland-based firm to provide insurance coverage for the party's national convention this summer in Philadelphia. South River Partners , a law and risk-management firm based in Reisterstown, Md., is a 100 percent minority-owned enterprise, the DNCC said. "After a thorough review of insurance brokerage firms, we concluded that South River Partners is a great fit for the 2016 Democratic National Convention," said Leah D. Daughtry, CEO for the DNCC.
October 19, 2015
'We bet on America when everyone else was running for the hills," boasts hedge fund manager Gary Hindes . As an investigative reporter in the 1970s, Hindes was kicked out of a federal archive in Wilmington. He later led Delaware's Democratic Party, helping Joe Biden build a prodigious network beyond its narrow borders. His Fallen Angels Fund buys deflated securities, and fights to reinject lost value. Often, that means fighting government agencies to fix what Hindes contends are wayward bailouts.
January 12, 2015 |
More Americans may be able to buy homes this year, by making down payments of just 3 percent of the value of their mortgages. A 97 percent loan-to-value option announced last month by Fannie Mae and Freddie Mac will be available in the first quarter, industry observers said. Just because lenders can offer such mortgages doesn't mean they will. Still, the prospect of needing only 3 percent down is likely to be a help for first-time buyers. Though some market observers worry that the option might create another housing bubble, others believe 3 percent-down mortgages could be one of the few ways to lure new buyers, particularly millennials, who have largely avoided home ownership since the real estate bust of 2008.
December 11, 2014 |
Responding to housing-industry concerns that tightened mortgage-credit rules would hamstring the critical first-time-buyer market, Fannie Mae and Freddie Mac will offer 3 percent down-payment loans to qualified borrowers. Fannie's My Community Mortgage program, open to first-time buyers with a 620 minimum credit score, starts this week. Freddie's Home Possible Advantage, available to all qualified buyers, begins in March. Andrew Bon Salle, a Fannie Mae executive vice president, said his program's goal was to help qualified borrowers gain access to mortgages, but added that it would not "solve all of the challenges around access to credit.
August 14, 2013
IF THE FEDERAL government is going to overhaul the way mortgages are sold, I hope as much emphasis is put on what's a manageable amount of debt for borrowers. It haunts me when I think of some of the mortgage loans I've seen and still see. Too many people, who certainly should have known better, agreed to buy homes when their monthly mortgage payments were 50 percent to upward of 70 percent of their net pay. That's just too much. President Obama has laid out plans to rebuild the housing market.
July 3, 2013 |
WASHINGTON - The federal government said Monday that it has received $66.3 billion in dividend payments from Fannie Mae and Freddie Mac after both reported stronger earnings at the start of the year. Fannie Mae has paid $59.4 billion to the U.S. Treasury and Freddie Mac has paid $7 billion. The payments reflect a housing recovery that has made the mortgage giants profitable again. They are also helping to lower their year's federal deficit. The government rescued Fannie and Freddie during the 2008 financial crisis after both incurred massive losses on risky mortgages.
June 29, 2013 |
A 34-story luxury apartment building, 2116 Chestnut, opens to its first tenants Friday, 16 months after ground was broken for the $100 million project. The 321-unit building is at 22d and Chestnut Streets. Rents include $1,700 for a studio apartment and $1,950 for a one-bedroom. Although 2116 Chestnut will not be finished for four to six more weeks, tenants will begin moving Friday into its first 14 floors. "Almost 100 people have rented apartments through our preleasing efforts," said John A. Buck, chairman and CEO of the Chicago development and leasing firm John Buck Co., which bought the property in October 2011.