Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3996876 times)

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14940 on: March 26, 2020, 07:00:06 AM »
weird situation with forbearance.  potus intimated in briefing that he might lift the crisis declaration in areas that are not badly hit by easter (midwest).  that presumably will allow for only one month of forbearance for most of those affected mortgagors (assuming jobs are still there to go back to).  or would holding crisis open for NY/Cali have effect of keeping crisis open for purposes of forbearance nationwide?


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14941 on: March 26, 2020, 07:06:38 AM »
weird situation with forbearance.  potus intimated in briefing that he might lift the crisis declaration in areas that are not badly hit by easter (midwest).  that presumably will allow for only one month of forbearance for most of those affected mortgagors (assuming jobs are still there to go back to).  or would holding crisis open for NY/Cali have effect of keeping crisis open for purposes of forbearance nationwide?

Part of the bill says experienced hardship during the coronavirus crisis, not as a result of the coronavirus crisis.  And there is zero proof needed to receive forbearance other than a statement saying you need it due to financial hardship.  To me that means anybody from anywhere can ask for (and can't be denied by law) relief.

With that said, I don't think many people will use the program. If you have a $3K mortgage and you don't pay for 12 months, you have a $36K lump sum payment in a year. 
"I have never seen a tombstone say 'I didn't work enough.' Nobody ever heard a Father say 'I held my kids too much'" Spend A Life by David Dunn, listen here: https://www.youtube.com/watch?v=QRYMn1mg8Ug&list=RDMMyUvxhGRUR3s&index=8

Covid-19_Survivor

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14942 on: March 26, 2020, 08:43:12 AM »
weird situation with forbearance.  potus intimated in briefing that he might lift the crisis declaration in areas that are not badly hit by easter (midwest).  that presumably will allow for only one month of forbearance for most of those affected mortgagors (assuming jobs are still there to go back to).  or would holding crisis open for NY/Cali have effect of keeping crisis open for purposes of forbearance nationwide?

Sure, but it's not going away by Easter. As overbllown the issue is for most America's heartland, cases are still doubling everyday. I don't think Potus can lift if we're still on wrong side of curve.

I follow everyday:  https://www.mrt.com/news/article/Coronavirus-case-reported-in-Crane-County-15143978.php

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14943 on: March 26, 2020, 08:59:20 AM »
weird situation with forbearance.  potus intimated in briefing that he might lift the crisis declaration in areas that are not badly hit by easter (midwest).  that presumably will allow for only one month of forbearance for most of those affected mortgagors (assuming jobs are still there to go back to).  or would holding crisis open for NY/Cali have effect of keeping crisis open for purposes of forbearance nationwide?

Part of the bill says experienced hardship during the coronavirus crisis, not as a result of the coronavirus crisis.  And there is zero proof needed to receive forbearance other than a statement saying you need it due to financial hardship.  To me that means anybody from anywhere can ask for (and can't be denied by law) relief.

With that said, I don't think many people will use the program. If you have a $3K mortgage and you don't pay for 12 months, you have a $36K lump sum payment in a year.

does the bill make clear when deferred payments are due? immediately after lifting crisis declaration? or just added to principal?
« Last Edit: March 26, 2020, 10:44:54 AM by cherzeca »

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14944 on: March 26, 2020, 09:07:02 AM »
does th4e bill make clear when deferred payments are due? immediately after lifting crisis declaration? or just added to principal?

It doesn't spell it out, but it does say forbearance and not modification.  Forbearance = lump sum payment.  Modification = extend the loan by a year (so your 30-year loan would become 31-year loan) or adjust your interest rate or spread the missed payments out over the duration of your loan.  There are certain situations that after the fact you can apply to modify it, but the lenders can say no.  So, the only guarantee for homeowners is that they can avoid paying their mortgage for 12 months.  Odds are the vast majority will have to pay lump sum, but some might qualify for modified terms but that's a huge gamble for the homeowner not knowing if they'd qualify.

Edit: With that said, there is an opportunity for savvy investors to skip their mortgage payments, invest the cash, earn some/any return, and have the discipline to pay the lump sum in 12 months.  Most Americans aren't that savvy nor have that level of discipline.  They'd likely blow it on a new luxury car or dining out 4 times a week at nice restaurants with the end result being they lose their home.
« Last Edit: March 26, 2020, 09:12:55 AM by Luke 5:32 »
"I have never seen a tombstone say 'I didn't work enough.' Nobody ever heard a Father say 'I held my kids too much'" Spend A Life by David Dunn, listen here: https://www.youtube.com/watch?v=QRYMn1mg8Ug&list=RDMMyUvxhGRUR3s&index=8

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14945 on: March 26, 2020, 10:06:55 AM »
does th4e bill make clear when deferred payments are due? immediately after lifting crisis declaration? or just added to principal?

It doesn't spell it out, but it does say forbearance and not modification.  Forbearance = lump sum payment.  Modification = extend the loan by a year (so your 30-year loan would become 31-year loan) or adjust your interest rate or spread the missed payments out over the duration of your loan.  There are certain situations that after the fact you can apply to modify it, but the lenders can say no.  So, the only guarantee for homeowners is that they can avoid paying their mortgage for 12 months.  Odds are the vast majority will have to pay lump sum, but some might qualify for modified terms but that's a huge gamble for the homeowner not knowing if they'd qualify.

Edit: With that said, there is an opportunity for savvy investors to skip their mortgage payments, invest the cash, earn some/any return, and have the discipline to pay the lump sum in 12 months.  Most Americans aren't that savvy nor have that level of discipline.  They'd likely blow it on a new luxury car or dining out 4 times a week at nice restaurants with the end result being they lose their home.

This could turn out really ugly. Hopefully the wave of delinquencies gets pushed off far enough that Calabria has had enough time to get FnF fully recapped and weather the storm, but what investors would buy in seeing this wave on the horizon?

Edit: actually, maybe it would just lead to a deluge of refinancings, not necessarily delinquencies. And FHFA could certainly direct FnF to be lenient on granting those if the alternative is a collapse of the whole system. Credit to seysmont on the Google Groups board for bringing up the refi possibility.
« Last Edit: March 26, 2020, 10:25:35 AM by Midas79 »

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14946 on: March 26, 2020, 10:47:28 AM »
it is my understanding that the big hit for GSEs is establishing loan loss reserves, and query how quickly that will be done under this somewhat unique circumstance.  the actual advancing of funds to the mbs pools is basically costless, de minimus interest rate of borrowings.

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14947 on: March 26, 2020, 02:02:40 PM »
Can someone clarify how MBA  members hurt themselves due to CRT and GSE’s are major winners as a result?

Would more lawsuits follow  as a result of more loot as the CONSERVATOR uses and misuses GSE’s to give free ride to homeowners in this mess than reimbursing GSE’s through 2T monies in the bailout?

“At this point in the mortgage market the winners and losers are picked. Servicers are HUGE losers. WFC doesn't bounce for a reason. CRTs and GSE's are winners. GSE's this time are risking taxpayer's capital and CRTs are a pipe dream of private mortgages, so they were spared. The market thought GSE's would be the losers. CRT buyers are losers because of leverage, though. GSE's will post profits until forbearances don't go into delinquencies, which they won't because the GSE's will refinance them. This was a nice screw job on MBA members. Who knew. “

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14948 on: March 26, 2020, 02:07:36 PM »
you do realize, Emily, that no one wants to respond to your posts when you set forth quotes that you not attribute as to source
« Last Edit: March 26, 2020, 06:25:08 PM by cherzeca »

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14949 on: March 26, 2020, 05:17:58 PM »
Well, first return the stolen NWS money as a start. Second, stop fighting the wrong in the court.

https://www.bloomberg.com/news/articles/2020-03-26/mnuchin-forms-task-force-to-confront-mortgage-firms-liquidity?srnd=premium