Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4470106 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15850 on: August 05, 2020, 02:45:54 PM »
How often do cases in front of SCOTUS get settled after oral arguments but before an opinion is issued? Do the Justices frown on this given their vast caseload and limited resources, or is it similar to lower courts where they are glad it happened so they can devote said resources elsewhere?

after oral arg, very rarely. after cert grant but before oral argument, rarely.  there was recent case involving NY gun laws, where NY passed a revision to litigated law that mooted the case after cert grant but before oral arg.  some judges get pissed (Alito), most just roll onto next case

The reason I ask is because if settling after oral arguments is difficult or impossible, there would be a de facto deadline for settlement. That could even be before the election if Collins gets scheduled for oral arguments in October.

Of course, we're already at the "rarely" stage since cert has been granted.

I just like to brainstorm on here, this line of thinking could be a longshot or just flat-out wrong.


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15851 on: August 05, 2020, 03:25:17 PM »
How often do cases in front of SCOTUS get settled after oral arguments but before an opinion is issued? Do the Justices frown on this given their vast caseload and limited resources, or is it similar to lower courts where they are glad it happened so they can devote said resources elsewhere?

after oral arg, very rarely. after cert grant but before oral argument, rarely.  there was recent case involving NY gun laws, where NY passed a revision to litigated law that mooted the case after cert grant but before oral arg.  some judges get pissed (Alito), most just roll onto next case

The reason I ask is because if settling after oral arguments is difficult or impossible, there would be a de facto deadline for settlement. That could even be before the election if Collins gets scheduled for oral arguments in October.

Of course, we're already at the "rarely" stage since cert has been granted.

I just like to brainstorm on here, this line of thinking could be a longshot or just flat-out wrong.

it is highly unusual for scotus to get a commercial case with so much value at stake to the parties before it...most cases they decide involve various forms of civil liberties, statutes that may govern the economy broadly (so important) but having limited value to the private parties before it...so parties are not usually playing high stakes poker before scotus, at least not in a commercial sense...so the commercial impetus to settle is not great for vast majority of scotus cases

orthopa

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TwoCitiesCapital

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15853 on: August 13, 2020, 09:21:41 AM »
https://www.wsj.com/articles/borrowers-face-new-fee-to-cover-heightened-risks-11597282215?mod=markets_lead_pos13

Fannie and Freddie increasing fees - seems temporary though given the "adverse market" title.

Jcmeg35

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15854 on: August 13, 2020, 09:35:54 AM »
https://www.wsj.com/articles/borrowers-face-new-fee-to-cover-heightened-risks-11597282215?mod=markets_lead_pos13

Fannie and Freddie increasing fees - seems temporary though given the "adverse market" title.

I could be wrong but this doesn't seem like a temporary move. Guessing this is one of a few levers FHFA is going to pull to increase rev and be able to demonstrate a higher ROE on the high capital level they will have the companies raise over next year.

TwoCitiesCapital

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15855 on: August 13, 2020, 09:57:30 AM »
https://www.wsj.com/articles/borrowers-face-new-fee-to-cover-heightened-risks-11597282215?mod=markets_lead_pos13

Fannie and Freddie increasing fees - seems temporary though given the "adverse market" title.

I could be wrong but this doesn't seem like a temporary move. Guessing this is one of a few levers FHFA is going to pull to increase rev and be able to demonstrate a higher ROE on the high capital level they will have the companies raise over next year.

Could be. Politically it'll be unpopular due to those costs just being passed on to consumers in a month or two.

And with a title like "adverse market fee", it'll be hard to justify continuing once forebearance and defaults renormalize.

But I also understand that the one of the most powerful forces in the political universe is inertia and so once the fee is there it may not come off.


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15856 on: August 13, 2020, 10:20:29 AM »
Tim Howard points out that given current very low rates and high refi activity there wonít be much refi activity in future years which will depress GSE revs to some extent.  So this fee is a way for GSEs to earn more revs on the refi activity which is being pulled forward. Big plus for GSE near term income statements

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15857 on: August 13, 2020, 10:26:08 AM »
Calabria-Mnuchin are racking up bonus points for housing anti-stimulus 3 months ahead of their boss's election.  Instead they should have a meeting and sign a 4th amendment rather than weakly wait for potential action post November -- it's called 'lame' duck for a reason.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15858 on: August 13, 2020, 11:12:49 AM »
This refi fee suggests to me that the GSEs and their financial advisors are well along in their modeling and analysis. And that FHFA is on board. I donít see a significant economic change to the business model occurring without a lot of backup work having been done, and without the goal of a cap raise being very much on target.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15859 on: August 13, 2020, 12:14:15 PM »
https://twitter.com/NickTimiraos/status/1293986044057182209
JP Morgan: At the GSEs current level of roughly $150 billion a month in refi loan guarantees, this new fee will incrementally increase the GSEs' revenue by $9 billion a year

That is significantly higher than I thought. The $9B should almost all go straight to pre-tax income because I doubt there is much marginal cost associated with the fee increase.

More significant is the fact that it's JPM saying this. Freddie's financial advisor. Let that sink in a bit.

I doubt this $9B is sustainable, but it shows me how easily FnF can tweak their income, ostensibly for the purpose of attracting private capital.