Freddie (FRE) & Fannie (FNM) 01 (May 08 - Feb 12)

Re: Freddie Mac (FRE) & Fannie Mae (FNM)

Postby winston » Fri Feb 11, 2011 6:12 pm

Someone mentioned that China lost US$450b on their investment in Freddie / Fannie.

Well they said they have been earning 6% a year ...
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Freddie Mac (FRE) & Fannie Mae (FNM)

Postby winston » Fri Feb 11, 2011 10:01 pm

White House seeks wind-down of Fannie, Freddie

WASHINGTON (Reuters) - The Obama administration will propose a wind-down of government-controlled mortgage buyers Fannie Mae and Freddie Mac, according to documents obtained by Reuters.

The White House proposed three long-term options to reduce the government's role in the housing market and took several shorter term steps aimed at raising the cost of government-backed mortgages.

Source: Reuters US Online Report Politics News
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Freddie (FRE) & Fannie (FNM) 01 (May 08 - Feb 11)

Postby winston » Tue Jan 31, 2012 8:54 am

Freddie Mac Betting Against Struggling Homeowners by Chris Arnold

Freddie Mac has invested billions of dollars, betting that U.S. homeowners won't be able to refinance their mortgages at today's lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.


Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.

But Freddie Mac has invested billions of dollars betting that U.S. homeowners won't be able to refinance their mortgages at today's lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.

These investments, while legal, raise concerns about a conflict of interest within Freddie Mac.

Public documents show that in 2010 and 2011, Freddie Mac set out to make gains for its own investment portfolio, by using complex mortgage securities that brought in more money for Freddie Mac when homeowners in higher interest-rate loans were unable to qualify for a refinancing.


Freddie Mac's trades came at a time when mortgage rates were falling to record lows. Millions of homeowners wish they could refinance, but their lenders tell them they can't qualify for today's low rates because of tight rules.

Freddie Mac is one of the gatekeepers with the power to set those rules, and lately, it has been saying no more often to homeowners.

That raises concerns among some industry insiders who see a conflict: Freddie Mac's own financial health improves when homeowners can't refinance.


http://www.npr.org/2012/01/30/145995636 ... homeowners
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