fannie mae: Housing Affordability, Mortgage Rates, And Home Sales - 07/03/09 01:21 AM
The NAR recently published their May Housing Affordability Index which showed that while affordability did drop from a record high 178.8 in April to 171.6 in May, it remains well above historic norms.
Prior to this year, the highest housing affordability index reading was 147.9 in 1973.  The first five months of 2009 the index has averaged 174.72.
To get some perspective on the current index for 2009 and the relationship to existing home sales, here is what the housing affordability index has looked like over the past couple of years according to the NAR:
Affordability Index / Mortgage Rates / Existing … (0 comments)

fannie mae: FHFA Authorizes Fannie and Freddie 125% LTV Refinances - 07/01/09 06:19 AM
In the latest sign that Washington has been behind the curve on this housing crisis, the FHFA announced today that they are finally changing their original refinance blueprint (Home Affordable Refinance Program, HARP) and are now authorizing Fannie Mae and Freddie Mac to include refinance LTV's of up to 125%, up from the 105% that the original plan had been based on.
This action is a result of the plan's initial failure in recognizing just how many homes are actually underwater and were unable to qualify for the 105% LTV. 
According to Moody's, there is an estimated 15.4 million homes that are worth less than … (32 comments)

fannie mae: Fed Gone Wild - 06/14/09 10:38 AM
According to a CNBC article, Jim Grant, the editor of Grant's Interest Rate Observer, said that, "the Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit."
The article stated that, "With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions."  In other words, the Fed would be considered insolvent.
If you are wondering about that math, according to Grant, the Fed is carrying a 46.6 asset to capital ratio. 
Two damning statements that Grant made were:
1.)  "If … (3 comments)

fannie mae: Fannie Mae Is The New AIG - 05/17/09 01:30 AM
Fannie Mae reported a first quarter loss of $23.2 billion and has submitted an additional request for $19 billion from the Treasury department to keep it afloat according to an article written by Aaron Smith with CNNMoney.com
The $19 billion is in addition to the $15.2 billion that had been drawn down in just the past three months from the $200 billion line of credit from they have received from the Fed.
Freddie Mac finds itself in the same position as well.
The two mortgage giants own or guarantee over $5 trillion of the $12 trillion mortgage market and both of them have already been … (3 comments)

fannie mae: Yet another reason to "fix" the housing market - 03/13/09 05:04 AM
Not as if the government should need anotherreason to fix the housing market considering the devastation it has had on the banking system and broader economy, but the latest news from Reuters about Freddie Mac losing $23.9 billion in the fourth quarter on top of the $25.3 billion loss in the third quarter should be yet another wake up call that what is currently being done to address the housing market is not working.
Ordinarily these types of losses wouldn't be a big deal, but when the tax payer is on the hook for them, as they are ever since September 8th … (4 comments)

fannie mae: Major banks to institute foreclosure moratoriums - 02/14/09 09:01 AM
Citi and JP Morgan have added their names to othermajor banks as well as government agencies that are going to agree to a self imposed foreclosure moratorium until the Obama administration has the time to iron out Washington's latest effort to stem the tide of a systemic foreclosure crisis.
If this sounds familiar, that's because that it is.  Banks, municipalities, and government agencies including Fannie and Freddie have been facilitating foreclosure moratoriums in some form for several months now.  And this is just one of three reasons why the housing market today actually appears much better than it actually is, I know, that is a … (6 comments)

fannie mae: Freddie Mac needs another lifeline from Treasury - 01/24/09 02:03 PM
According to a report put out by the AP on January 23rd, Freddie Mac will need up to $35 billion from the Treasury in order to weather the rising number of foreclosures that are on their books, and Fannie Mae may not be far behind.  This is in addition to the $13.8 billion Freddie Mac already received in November.
Between the two of them, according to an article on Bloomberg.com by Dawn Kopecki and Jody Shenn, they own or guarantee nearly $5.2 trillion of the $12 trillion mortgage market.  And thanks to their failures, the tax payers of America, yes, you and I, … (4 comments)

fannie mae: The only thing worse than screwing up, is not admitting when you do - 12/09/08 04:59 AM
According to an article put out by Reuters today, the former Fannie Mae CEO, Franklin Raines said, "Fannie Mae did not cause the current crisis."
That's interesting, then why did the government have to put your company into conservatorship and put the tax payers on the hook for the trillions of dollars of loans you originated and guaranteed?
Then why is it that our housing market is suffering from one of the most severe downturns since the great depression, and Fannie Mae and Freddie Mac are responsible for half of the loans in the market place, yet you "did not cause the current crisis"?
(4 comments)

 
Mark MacKenzie

Mark MacKenzie

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