This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Fannie Mae Asks for $7.8B More From U.S.

McCain called the FHFA's treatment of Fannie and Freddie executives ""outright corruption and blatant abuse of the American taxpayer."

The FHFA on Oct. 27 projected that at the end of 2014, "cumulative Treasury Draws (including dividends)," would "range from $220 billion to $311 billion."

The regulator is hoping to help Fannie Mae and Freddie Mac recoup some of their losses -- now taxpayer losses -- through lawsuits against large mortgage lenders whose mortgage-backed securities were purchased by the government-sponsored mortgage companies, play out.

The regulator in September sued 17 large banks -- including Bank of America (BAC - Get Report), JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS - Get Report), Morgan Stanley (MS - Get Report), and Citigroup (C - Get Report) -- to demand full rescission and recovery of losses sustained by the GSEs from the purchase of nearly $200 billion in mortgage-backed securities from the banks.

The mortgage-backed securities sales to the Fannie and Freddie by Bank of America -- including sales by Countrywide and Merrill Lynch before both companies were acquired by Bank of America -- totaled $57.5 billion, while the FHFA said JPMorgan's securities sales to the government-sponsored enterprises - including those by Washington Mutual before the thrift failed and was sold by the Federal Deposit Insurance Corp. to JPMorgan in Sept. 2008 -- totaled $33 billion.

For Citigroup, the mortgage-backed securities sales to Fannie and Freddie described in the FHFA lawsuit totaled $3.5 billion, while securities sales to the GSEs totaled $11.1 billion for Goldman, $10.6 billion for Morgan Stanley, and $3.5 billion for Citigroup.

With President Obama's expansion of the Home Affordable Refinance Program, or HARP -- which beginning early in 2012 will remove the current 125% loan-to-value ratio for refinancing of mortgage loans held by Freddie Mac and Fannie Mae -- refinancing activity is expected to accelerate, putting pressure on the government-sponsored mortgage giants' interest income and margins.

The FHFA plans to release additional details of the expanded HARP on Nov. 15.

RELATED STORIES:




-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.81 0.00%
C $52.42 0.00%
GS $189.79 0.00%
JPM $61.28 0.00%
MS $35.79 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs