Tuesday, November 20, 2007

Freddie Needs Fresh Capital.....

When you read this quote from Freddie or Fannie you know something is brewing.......I suggest to read the entire Freddie Mac Presentation including lots of details on the billions of losses, mark to market, cure rates etc....

Wenn man diese Ausführung von Freddie oder Fannie zu hören bekommet weiß man das Ungemach nicht lange auf sich warten läßt..... Ich empfehle die gesamte Freddie Mac Präsentation zu lesen. Die geben u.a. Hinweise wo genau diie Mrdverluste sich angehäuft haben und was evtl. noch so alles kommen könnte......

Considering a variety of options to manage to the mandatory target capital surplus and respond to regulatory concerns

From the Press Release

Freddie Mac's regulatory core capital was estimated at $34.6 billion at September 30, 2007, which represented an estimated $8.5 billion in xcess of the regulatory minimum capital requirement, and an estimated $0.6 billion in excess of the 30 percent mandatory target capital surplus directed by the Office of Federal Housing Enterprise Oversight OFHEO).

Bloomberg Freddie Has 3rd-Quarter Loss, Seeks to Raise Capital

Freddie Mac hired Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. to advise it on capital options.

Bloomberg Freddie Mac May Need to Raise $6 Billion to Stem Capital Slide

Freddie Mac, the second-largest U.S. mortgage-finance company, may need to raise as much as $6 billion to bolster its capital amid the worst housing slump in at least 16 years.

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6 Comments:

Blogger Edgar said...

Hi jmf,

Lending copious amounts of money to deadbeats is a great business to be in. ;-)

5:13 PM  
Anonymous Anonymous said...

I think it would be great if you covered on your site just what exactly qualifies as a conforming loan for Fannie Mae and Freddie Mac. It seems like just about anything can be a conforming loan. Fannie will even purchase 40 year fixed-rate mortgages and 40-year hybrid adjustable rate mortgages (ARMS) with initial fixed periods of three, five, seven, or ten years. I've also heard that Fannie and Freddie do "fast forward documentation" which is a waiver of employment and income verification.

5:15 PM  
Anonymous Anonymous said...

Here's what $460,115,000 of Merrill Lynch toxic waste looks like:

As of the Cut-off Date, the assets of the Trust Fund consisted of two
groups ("Group I" and "Group II" respectively, and each, a "Loan Group") of 814
conventional, adjustable rate mortgage loans (the "Mortgage Loans") secured by
first liens on one- to four-family residential properties, including townhouses,
condominiums and co-op loans (each, a "Mortgaged Property"), all of which have
original terms to maturity of 30 years or less, having an aggregate Stated
Principal Balance as of the Cut-off Date of approximately $463,360,704 (the
"Aggregate Cut-off Date Balance"). Approximately 82.21% of the Mortgage Loans
provide for payment of interest at the related Mortgage Rate, but no payment of
principal
, for a period of seven or ten years following the origination of the
related Mortgage Loan. Following the seven or ten-year interest-only period, the
Scheduled Payment with respect to each such Mortgage Loan will be increased to
an amount sufficient to amortize the principal balance of such Mortgage Loan
over its remaining term, and to pay interest at the related Mortgage Rate.

Approximately 48.86% of the Mortgage Loans were originated as stated income
loans
.
---
Most of the loans are tied to the LIBOR.

http://www.secinfo.com/dsvrn.z5vn.htm

5:18 PM  
Blogger jmf said...

Moin,

WOW!

Toxic waste indeed!!!!!

10:29 PM  
Anonymous Anonymous said...

It's toxic waste, but if you put your ear to it, you can hear the ocean... or is that sound a faint ticking that's getting louder and louder?

You would have thought that whoever bought that $460 million note would have looked at the prospectus.

11:36 PM  
Blogger jmf said...

Moin,

and still the market has an upday yesterday..... DENIAL

Looks like not everybody is so relaxed.....

Hong Kong H-share market in 5% plunge to 16,021.31

11:46 PM  

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