NEW YORK — For more than five years, many homeowners who complained about mortgage industry foreclosure abuses have wondered whether anyone with a financial stake in keeping them in their home was paying attention. On Thursday, with the release of a new report from a federal watchdog, they got their answer: No.
The report, by the inspector general of the Federal Housing Finance Agency, says banks and other companies that manage more than 10 million home loans for Freddie Mac “largely failed” to alert the mortgage giant to the most serious category of homeowner complaints, despite a requirement they do so. These “escalated complaints” often include the most serious allegations of misconduct, including improper fees, misapplied mortgage payments and a frustrating cycle of lost paperwork and unreturned calls. In some instances, the mismanagement has led to a wrongful foreclosure.
“The results are shocking on a number of different levels,” said Steve Linick, the FHFA inspector general, in an interview with The Huffington Post. “It is surprising that servicers were not reporting in such large numbers, that Freddie was not on top of this, and that [the FHFA] did not catch it in its exam.”
In the following video, Motley Fool financials analysts Matt Koppenheffer and David Hanson discuss the next major lawsuit to show up at Bank of America‘s doorstep. Freddie Mac is suing 15 major international banks over their roles in the LIBOR manipulation scandal, which cost Fannie Mae and Freddie Mac a combined $3 billion in losses. Matt explains to investors just how big of an impact on Bank of America this new lawsuit could have.
Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool‘s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.
var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Matt Koppenheffer and David Hanson“, contentId: “cms.25785”, contentTickers: “NYSE:C, NYSE:BAC, NYSE:JPM, NYSE:BCS, NYSE:RBS”, contentTitle: “Is This the Next Legal Nightmare for Bank of America?”, hasVideo: “True”, pitchId: “29”, pitchTickers: “NYSE:BAC”, …read more Source: FULL ARTICLE at DailyFinance
As the economy has improved, many investors have feared that the Federal Reserve would start to signal its eventual exit from its extraordinary quantitative easing measures and its loose monetary policy. Yet at least for now, the Fed is showing few signs of that happening anytime soon, as its latest announcement this afternoon made it clear that the policymaking body wouldn’t let up on its stimulus moves until economic gains have become sustainable.
Stocks moved higher on that news, and although major indexes didn’t manage to score new records, the Dow Jones Industrials rose 56 points, and the broader market rose even more, leaving the S&P 500 within about six points of a new all-time high.
Dow-component banking giants JPMorgan Chase and Bank of America put in mixed performances, with JPMorgan falling slightly but B of A climbing more than half a percent. Late yesterday, mortgage giant Freddie Mac sued 15 international banking institutions, including JPMorgan and B of A, in connection with the LIBOR rate-fixing scandal that first emerged last summer. Given how important interest rates are to the government-sponsored enterprise, which buys mortgages from banks and repackages them into mortgage-backed securities, Freddie Mac stands to have lost a great deal from alleged manipulation of rates.
Verizon fell 0.7%, giving back some of the ground it gained yesterday. The company’s novel approach at trying to get video content providers to accept payments based on actual viewership rather than on a per-subscriber basis could disrupt the industry, but even if it succeeds, Verizon would likely reap the benefits more than its customers would.
Finally, outside the Dow, Oracle finished the regular session up slightly but then plunged 5% to 7% in after-hours trade immediately after releasing its quarterly earnings report. It missed earnings estimates by a penny, but worse was a shortfall of more than 4% in revenue compared to what analysts had expected to see. Its hardware systems segment fell the most sharply, with sales down 23%. Services revenue also fell 8%, while sales from new software licenses and cloud-based software subscriptions dropped 2%. For Oracle, the final number is the most important, as it fell well short of the company’s own projections for growth of 3% to 13% and shows the huge level of competition in the space right now.
Even with the LIBOR scandal hanging over its head, Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. Get the latest from our premium research report on the bank, in which our top financial analysts provide their insight on B of A’s prospects going forward. Click here now to claim your copy.
The fallout from the massive Libor scandal last year continues as Freddie Mac sues over a dozen of financial firms including Bank of America, Citigroup and JPMorgan Chase over losses tied to the benchmark rate. …read more Source: FULL ARTICLE at Forbes Latest
The Dow Jones Industrial Average is up as investors ignore the events in Cyprus and wait for the Federal Open Market Committee’s statement at 2 p.m. EDT. As of 1:15 p.m. EDT the Dow is up 52 points, or 0.36%, to 14,508. The S&P 500 was up 0.57% to 1,557.
Last night, Cyprus’ parliament voted against the controversial plan to tax the country’s bank accounts. While the EU has offered 10 billion euros in bailout funds, Cyprus needs another 6 billion euros to 7 billion euros to shore up its financial system. Cyprus is considering numerous options to close the gap, including reaching out to Russia for support. If Cyprus is unable to raise the necessary funds, banks will go bankrupt and the country’s economy will be crushed, possibly necessitating an exit from the euro.
While it’s unclear what will happen in Cyprus, the markets are primarily focused on the Federal Open Market Committee’s impending statement. As part of QE3, the Fed is currently buying $85 billion worth of long-term assets each month and has continued to keep the target for the federal-funds rate between 0% and 0.25%. The committee said in December that its plan to keep rates low “will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2% longer-run goal, and longer-term inflation expectations continue to be well anchored.”
With the unemployment rate at 7.7% and the most recent consumer price index showing 0.7% inflation, I expect the Fed to stick with its stated policy.
Today’s Dow leaders Today’s Dow leader is Merck, up 1.1%. Merck and the pharmaceutical sector as a whole are up today. Pharmaceuticals are affected by government policy, but their results are largely independent from the health of the economy and the Federal Reserve’s policies. Merck faces some difficult challenges with upcoming patent expirations, which likely will not allow the company to raise its dividend. That said, Merck shares currently yield a substantial 3.9%, and the company is a member of the 2013 Dogs of the Dow.
Secondfor the day so far is Bank of America , up 1%. Yesterday it was announced that Bank of America and numerous other banks were sued by Freddie Mac for losses from the bank’s supposed manipulation of Libor, which many mortgage bonds and derivatives are based upon. It’s unclear whether the lawsuit will have any meaningful effect on the bank. As the economy improves, Bank of America’s results are likely to improve with it. Investors got a boost last week when the bank passed its Federal Reserve stress tests and earned approval of its plan to buy back $5 billion worth of stock over the next year.
In 2012, fueled by historically low interest rates and stabilizing home prices, Wells Fargo‘s mortgage banking unit churned out an industry-leading $524 billion of mortgage loans and boosted the unit’s revenue 49% compared to 2011. To put this $524 billion in perspective, not even the infamous Countrywide Financial, now owned by Bank of America , eclipsed the $500 billion mark in the boom years of 2005 or 2006.
While banks like B of A and smaller lenders scaled back mortgage operations, Wells Fargo remained steadfast in its position in the market and was able to take full advantage of the recent refinancing boom. The simple thought that Wells Fargo‘s current mortgage business is even bigger than Countrywide’s in its heyday may cause Wells Fargo shareholders to cringe.
Source: Wells Fargo 10-Ks.
However, it is important to remember that not all mortgages are created equally. The vast majority of mortgage loans in the United States fall into two categories: Conforming and nonconforming.
Conforming mortgages are loans that have a specified limited loan amount ranging between $417,000 and $625,000, depending on the area, and meet certain debt-to-income ratio standards. These limits are set by the Federal Housing Finance Agency and determine which mortgage institutions like Fannie Mae and Freddie Mac can purchase from lenders and securitize. Naturally, nonconforming mortgage loans do not meet these standards and must either be kept on the lender’s books or securitized in the private market, a market that has since dried up since the financial crisis.
The main difference between Wells Fargo‘s mortgage volume today and Countrywide’s in 2006 is a shift in mortgage type. A staggering 46% of Countrywide’s loans were non-conforming loans. Before investors became almost completely opposed to private-label mortgage-backed securities, Countrywide was able to profitably market these mortgages into securities. Once the credit crisis hit, Countrywide (then part of B of A) had no way to keep its origination engine churning in the absence of private-label liquidity.
Source: Countrywide Financial‘s 2006 10-K.
Unlike 2006, conforming mortgages are now driving the increase in origination volume. Due to the Federal Reserve‘s presence in the market and absence of credit risk associated with agency mortgaged-backed securities, liquidity has been flowing through Wells Fargo and other originators as loan supply has kept pace with the enormous refinancing demand. Refinancing demand may taper off as interest rates eventually creep higher, and Wells Fargo‘s revenue from its mortgage banking operation will probably decline from current levels. Despite experiencing enormous volume, given the nature of its originations, Wells Fargo‘s shareholders should not be concerned about becoming the second-coming of Countrywide.
Wells Fargo‘s dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the …read more Source: FULL ARTICLE at DailyFinance
The Office of the Comptroller of the Currency lowers its rating of J.P. Morgan Chase & Co. (NYSE: JPM) management. (Reuters)
Fannie Mae and Freddie Mac expect to pay back taxpayer money sooner than expected. (Reuters)
Microsoft Corp. (NASDAQ: MSFT) says it supports a government review of potential bribery charges. (Reuters)
Yahoo! Inc. (NASDAQ: YHOO) may buy a controlling position in video site Dailymotion. (Reuters)
Walgreen Co. (NYSE: WAG), Alliance Boots and AmerisourceBergen Corp. (NYSE: ABC) set a marriage that could affect distribution of medicines around the world. (WSJ)
Volkswagen will recall 384,181 vehicles in China. (WSJ)
American Airlines and U.S. Airways Group Inc. (NYSE: LCC) defend their plan for a merger before the Senate Judiciary Committee. (WSJ)
The HTC One will be delayed because of parts supplies, a blow to the troubled smartphone firm. (WSJ)
Cyprus and the European Union embark on plans to salvage its bailout after a deposit tax failed to get parliament support. (WSJ)
EBay Inc. (NASDAQ: EBAY) will make its seller fees simpler in an effort to compete with Amazon.com Inc. (NASDAQ: AMZN). (WSJ)
Anadarko Petroleum Corp. (NYSE: APC) finds what it claims is a huge oil field in the Gulf of Mexico. (FT)
NEW YORK (Reuters) – Mortgage finance company Freddie Mac is suing more than a dozen banks for losses from the alleged manipulation of the benchmark interest rate known as Libor.
Bank of America Corp, JPMorgan Chase & Co, UBS AG and Credit Suisse Group AG are among the banks named as defendants in the lawsuit.
Freddie Mac, which invested in mortgage bonds and swaps tied to U.S. dollar Libor, claims the banks colluded to rig the benchmark from 2007 to 2010, according to the complaint, which was filed March 14 in U.S. District Court for the Eastern District of Virginia.
Hatteras Financial Corp. Declares First Quarter 2013 Dividends on Shares of Common and Preferred Stock
WINSTON-SALEM, N.C.–(BUSINESS WIRE)– The Board of Directors of Hatteras Financial Corp. (NYS: HTS) (the “Company”) today declared cash dividends on shares of both its common and preferred stock for the first quarter of 2013.
Common Stock Dividend
The Company’s Board of Directors today declared a quarterly dividend of $0.70 per common share for the first quarter of 2013. The dividend will be paid on April 19, 2013, to stockholders of record on April 1, 2013, with an ex-dividend date of March 27, 2013.
7.625% Series A Cumulative Redeemable Preferred Stock
The Board of Directors also declared a quarterly dividend of $0.4765625 per share of the Company’s 7.625% Series A Cumulative Redeemable Preferred Stock for the first quarter of 2013. The dividend will be paid on April 15, 2013, to stockholders of record on April 1, 2013, with an ex-dividend date of March 27, 2013.
About Hatteras Financial Corp.
Hatteras Financial Corp. is a real estate investment trust formed in 2007 to invest in single-family residential mortgage pass-through securities guaranteed or issued by U.S. Government agencies or U.S. Government-sponsored entities, such as Fannie Mae, Freddie Mac or Ginnie Mae. Based in Winston-Salem, N.C., the Company is managed and advised by Atlantic Capital Advisors LLC. The Company is a component of the Russell 1000® index.
Hatteras Financial Corp. Kenneth A. Steele, Chief Financial Officer 336-760-9331 www.hatfin.com or CCG Investor Relations Mark Collinson, Partner 310-954-1343 www.ccgir.com
KEYWORDS: United States North America North Carolina
Are Fannie Mae and Freddie Mac really still safe from the bankruptcy chamber? 24/7 Wall St. is looking for a reality check here and we find it surprising that the giant moves here have hardly taken on the attention deserved for such a dire situation. Fannie Mae (FNM) and Federal Home Loan Mortgage Corporation (FMCC) are both surging to new 52-week highs and it may be an instance where this is simply the pen being mightier than the sword.
The Wall Street Journal previously brought attention to an SEC filing from last Thursday showing that Fannie Mae would delay its annual report because it needed more time to evaluate whether or not it could recapture some of its valuation allowance for deferred tax assets as of the end of 2012. It is no small sum either: $64.1 billion. That being said, traders, investors and speculators are all going to be paying close attention here.
As a reminder, both Fannie Mae and Freddie Mac remain under government conservatorship. They are mathematically bankrupt, but that is a different story. It is also hard to call companies bankrupt when their shares are up so much.
Fannie Mae shares are up a whopping 43% at $0.7468 on more than 66 million shares. Federal Home Loan Mortgage Corporation (FMCC) shares are up 38% at $0.715 on about 30 million shares.
It is hard to imagine this being possible, but technically these companies might be eligible to get listed on proper non-OTC exchanges if there is another day of gains like this. Of course those share prices would have to remain above the $1.00 for 30 to 45 days, but that is another matter.
It seems odd to see that MBIA Inc. (NYSE: MBI) is down almost 4% at $11.35 after runs like this.
Filed under: 24/7 Wall St. Wire, Accounting, Active Trader, Annual Report, Banking & Finance, Cult Stock, Earnings, Economy, Housing Tagged: FMCC, FNMA, MBI
Prudential Mortgage Capital Company expands Agency Gateway Program
CHICAGO–(BUSINESS WIRE)– Prudential Mortgage Capital Company today announced the expansion of its Agency Gateway Program for multifamily properties. The company’s decision to expand the program reflects greater demand among property owners for bridge financing until they qualify for longer-term loans from Fannie Mae or Freddie Mac. Prudential Mortgage Capital Company is the commercial mortgage lending business of Prudential Financial, Inc. (NYS: PRU) .
The business is looking to originate at least $200 million in program loans in 2013, up from the $100 million targeted under the previous program. Prudential Mortgage Capital Company‘s Enhanced Agency Gateway Program provides short-term, floating-rate financing to multifamily borrowers who currently do not qualify for long-term agency loans. This bridge program provides borrowers additional time to stabilize multifamily properties and maximize permanent financing options.
The enhanced program provides loan terms from three months to three years compared with less than 12 months under the existing program. Additionally, the program features greater flexibility, offering loans between $5 million and $100 million for Class B or better multifamily properties in strong markets. Another feature of the expanded program is that the company will make a limited amount of strategic equity investments in funds that develop and purchase multifamily properties in select markets.
“As borrowers increasingly look to upgrade aging properties and seek higher rents commensurate with the market, there is a growing need for financing options to help them achieve their goals. Our Enhanced Agency Gateway Program provides flexible financing solutions for our borrowers and allows us to address this demand,” said Michael McRoberts, managing director and head of Prudential Mortgage Capital‘s agency lending platform.
Prudential Mortgage Capital Company is a national full-service, commercial and multifamily mortgage financebusiness with more than $72.6 billion in assets under management and administration as of December 31, 2012. Leveraging a 135-year history of real estate finance, the company offers one of the most comprehensive lines of real estate finance products and originates loans for Fannie Mae DUS®, Freddie Mac Program Plus® and specialized affordable housing programs; FHA; Conduit; Prudential’s general account and proprietary balance sheet program; and other institutional investors. The company maintains a loan servicing portfolio of approximately $70.4 billion, as of December 31, 2012. For more information, please visit http://www.prumortgagecapital.com.
Massachusetts Attorney General Martha Coakley has run out of patience with the nation’s top housing official.
On Monday, after more than a year spent arguing that Fannie Mae and Freddie Mac should permit mortgage principal balance reductions in some instances, Coakley joined with other influential state attorneys general, including New York’s Eric Schneiderman, in a letter calling for the ouster of Federal Housing Finance Agency acting director Ed DeMarco. In an interview with The Huffington Post, Coakley said DeMarco “was missing a huge opportunity” to help struggling borrowers with his “obstinate resistance to make a change that would help stabilize the economy.”
“It is inexplicable to see a federal agency set up to help borrowers doing the opposite,” she said.
While times have been tough for all mortgage REITs, those that dabble exclusively in government sponsored entity-backed paper have suffered the most from QE3, as shrinking dividends become the norm. Even hybrid mREITs like Two Harbors , which invests in both GSE mortgage-backed securities as well as non-agency backed MBSes, experienced a temporary drop in their payout last fall, though they made up for it by year’s end.
Hybrid mREITs are more flexible in their investments than their pure-agency brethren, and Two Harbors has proved itself more adaptable than most. Late last week, the company announced that one of its subsidiaries is now licensed to service mortgage loans, which allows Two Harbors to invest in mortgage servicing rights for loans backed by Freddie Mac. This puts the mREIT in league with MSR heavies Nationstar Mortgage and Ocwen Financial.
Not afraid to take a new direction The business of servicing mortgages has taken off over the past year or so, as banks sell their MSRs to comply with new capital rules. Both Nationstar and Ocwen have seen explosive growth in the last year, with both companies seeing a share value increase of about 150% during that time. Mortgage servicing is lucrative — a fact that did not go unnoticed by Two Harbors.
This is not the first time the trust has jumped on a profitable new bandwagon. Noting the big profits being realized by private equity firms like BlackstoneGroup, Two Harbors created a portfolio of foreclosed single-family homes to renovate and rent, then spun off said portfolio into a stand-alone mREIT called Silver Bay Realty . Though the stock has cooled a bit from its meteoric rise a few weeks ago, insiders apparently have faith in the company, purchasing 37,750 shares so far this month.
Stalwarts are changing strategies, too Even a couple of pure-agency players have exhibited a new flexibility lately. As fans of the sector know, Annaly Capital has recently announced its intention to branch out into commercial MBSes through its planned purchase of CreXus Investment , a trust it already manages. Also, Western Asset Mortgage noted in its December dividend announcement that it had, for the very first time, added some non-agency MBSes to its formerly agency-only mix.
Times are changing, and many mortgage REITs are finding that a willingness to adjust can be good for business — which generally means good tidings for investors, as well.
There’s no question Annaly Capital‘s double-digit dividend is eye-catching. But can investors count on that payout sticking around? With the Federal Reserve keeping interest rates at historically low levels, Annaly has had to scramble to defend its bottom line. In The Motley Fool’s premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!
Two Harbors Investment Corp. Subsidiary Named Federal Home Loan Mortgage Corporation Licensed Servicer
NEW YORK–(BUSINESS WIRE)– Two Harbors Investment Corp. (NYSE: TWO; NYSE MKT: TWO.WS) announced today that one of its wholly-owned subsidiaries received approval as a servicer under the Federal Home Loan Mortgage Corporation’s (“Freddie Mac“) home mortgage (1-4 unit) program. This approval allows the company to invest in Mortgage Servicing Rights (MSRs) on Freddie Mac loans.
Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, residential mortgage loans and other financial assets. Two Harbors is headquartered in Minnetonka, Minnesota, and is externally managed and advised by PRCM Advisers LLC, a wholly-owned subsidiary of Pine River Capital Management L.P. Additional information is available at www.twoharborsinvestment.com.
Additional Information
Stockholders and warrant holders of Two Harbors, and other interested persons, may find additional information regarding the company at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Two Harbors Investment Corp., 601 Carlson Parkway, Suite 1400, Minnetonka, MN 55305, telephone 612-629-2500.
At the end of last week, Chimera Investment Company finally broke its silence. For over a year, the high-yielding mortgage REIT had kept investors largely in the dark about its financial condition and performance, releasing only cursory updates about its GAAP and economic book values in lieu of its quarterly and annual financial filings. The reticence had gotten so bad that on three occasions, it had to request permission from the NYSE to allow its stock to continue trading on the exchange.
The issue, as we learned last August, was that Chimera had incorrectly accounted for the deterioration in its non-agency residential mortgage-backed securities portfolio, which makes up roughly 75% of the company’s holdings. By doing so since its inception in 2007, it had overstated its net income by a factor of nearly three. But critically, the impact on its balance sheet and thus book value was neutral.
For a time, this led analysts, including me, to question the integrity of Chimera’s executive team. Fueling my concerns was the fact that both its chief executive officer and chief financial officer are related, respectively, to a director and executive at Annaly Capital Management , Chimera’s manager. The implication being that nepotism as opposed to merit was behind both their positions and seven-figure salaries.
But after combing through Chimera’s 2011 10-K, which was filed belatedly last Friday, I’ve concluded that the issue appears rather to be one of competence and not integrity. And specifically, competence about the manner in which credit-impaired non-agency MBSes should be treated for accounting purposes. Bear with me for a bit, and you’ll see what I mean.
Painting with a very broad brush, there are two sets of rules that a financial company like Chimera uses to account for MBSes. The first set governs agency MBSes — that is, MBSes that are either issued or otherwise backed by Fannie Mae and Freddie Mac. On the balance sheet, if these are characterized as available for sale, as they are on most REIT balance sheets, then they are held at fair value. Any deterioration in value, which is bound to be minimal assuming the security wasn’t egregiously overpaid for, is typically recorded as other comprehensive income (loss), or “OCI.” And on the income statement, the amount of interest recorded over the life of the security is equal to the contractual cash flows of the security and the accretion/amortization of any purchase discount or premium.
The operative word in the rule governing interest income on agency MBSes is “contractual.” Because the interest payments on agency MBSes are implied to be insured by the full faith and credit of the United States, outside of prepayment risk, it’s effectively safe to presume that all such payments will be made. The amount of interest accrued each month, in turn, is a function of the contractual — and not the actual or expected — cash flows of the security and thus the underlying mortgages. In addition, …read more Source: FULL ARTICLE at DailyFinance
Capstead Mortgage Corporation Declares a $0.31 Per Share First Quarter 2013 Common Dividend
DALLAS–(BUSINESS WIRE)– Capstead Mortgage Corporation (NYS: CMO) announced today that it will pay a first quarter 2013 dividend of $0.31 per common share on April 19, 2013 to stockholders of record as of March 28, 2013.
About Capstead
Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead earns income from investing in a leveraged portfolio of residential adjustable-rate mortgage pass-through securities issued and guaranteed by government-sponsored enterprises, either Fannie Mae or Freddie Mac (together, the “GSEs”), or by an agency of the federal government, Ginnie Mae.
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “will be,” “will likely continue,” “will likely result,” or words or phrases of similar meaning. Forward-looking statements are based largely on the expectations of management and are subject to a number of risks and uncertainties including, but not limited to, the following:
changes in general economic conditions;
fluctuations in interest rates and levels of mortgage prepayments;
the effectiveness of risk management strategies;
the impact of differing levels of leverage employed;
liquidity of secondary markets and credit markets;
the availability of financing at reasonable levels and terms to support investing on a leveraged basis;
the availability of new investment capital;
the availability of suitable qualifying investments from both an investment return and regulatory perspective;
changes in legislation or regulation affecting exemptions for mortgage REITs from regulation under the Investment Company Act of 1940;
Ellie Mae Announces Keynote Speakers for the 2013 Ellie MaeEncompass Experience
PLEASANTON, Calif.–(BUSINESS WIRE)– Ellie Mae® (NYS: ELLI) , a leading provider of enterprise level, on-demand automated solutions for the residential mortgage industry, today announced the keynote speakers for its second annual national user conference, the 2013 Ellie Mae Encompass® Experience, to be held Oct. 13 – 16, 2013 at the Wynn Hotel in Las Vegas, NV.
The keynote speakers, who will offer their unique perspectives on the mortgage industry, economy and business leadership, include:
David Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA). Prior to joining the MBA, Mr. Stevens was the Assistant Secretary for Housing and Federal Housing Commissioner at the United States Department of Housing and Urban Development, senior vice president at Freddie Mac, an executive vice president at Wells Fargo and president and chief operating officer of Long and Foster Companies.
Geoff Colvin, senior editor-at-large of FORTUNE and author of Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else. As a longtime editor and columnist for FORTUNE and the anchor of Wall Street Week with FORTUNE on PBS, Mr. Colvin has become one of America’s sharpest and most respected commentators on leadership, globalization, wealth creation, the info-tech revolution and related issues.
Harvey Mackay, author of seven New York Times bestsellers, including Swim With the Sharks Without Being Eaten Alive and Beware the Naked Man Who Offers You His Shirt. For the last 20 years, Mr. Mackay has been a nationally syndicated columnist for United Feature Syndicate, with articles appearing in 100 newspapers and magazines around the country. Toastmasters International named Mr. Mackay one of the top five speakers in the world.
“The overall feedback we received for Encompass Experience 2012 was incredibly positive,” said Jonathan Corr, president and chief operating officer at Ellie Mae. “Many of the 1,200-plus attendees specifically called out our strong lineup of speakers. We believe the keynotes for the 2013 Ellie MaeEncompass Experience will build on that experience and be even more exciting and insightful.”
The 2013 Ellie MaeEncompass Experience is an invitation-only event for current Ellie Mae clients, including senior management, executives, system administrators, operations managers, loan officers and processors, compliance specialists, closers, secondary market managers and users of all experience levels. This year, Ellie Mae is expanding the summit to add …read more Source: FULL ARTICLE at DailyFinance
CYS Investments, Inc. Board of Directors Declares First Quarter 2013 Common Stock Dividend of $0.32 Per Share, and Preferred Stock Dividend
NEW YORK–(BUSINESS WIRE)– The Board of Directors of CYS Investments, Inc. (NYS: CYS) (the “Company”) today declared a quarterly dividend of $0.32 per share of common stock for the first quarter of 2013. The common stock dividend will be paid on April 17, 2013 to common stock stockholders of record on March 25, 2013.
In accordance with the terms of the 7.75% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) of the Company, the Board of Directors of the Company has declared a Series A Preferred Stock cash dividend of $0.484375 per share of Series A Preferred Stock for the quarterly period that began on January 15, 2013, and ends on April 14, 2013. This dividend is payable on April 15, 2013 to Series A Preferred Stock stockholders of record as of April 1, 2013.
About CYS Investments, Inc.
CYS Investments, Inc. is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Company refers to these securities as Agency RMBS. The Company has elected to be taxed as a real estate investment trust for federal income tax purposes.
Forward-Looking Statements Disclaimer
This press release contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the payment of the dividends. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us, including those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which has been filed with the Securities and Exchange Commission. If a change occurs, these forward-looking statements may vary materially from those expressed in this release. All forward-looking statements speak only as of the date on which they are made. Except as required by law, we are not obligated to, and do not intend to, …read more Source: FULL ARTICLE at DailyFinance
The bear market that ended four years ago was a once-in-a-lifetime event. In the Dow Jones Industrial Average‘s century-plus history, only the Great Depression produced a steeper decline in market prices, and no other bear market in the Dow’s history has ever endured a larger drop in corporate earnings. More than 4 million homes went into foreclosure between 2006 and 2011. Nearly 500 banks failed, and hundreds more were kept afloat by a massive injection of government bailout money.
The Dow’s final closing price of 6,547.05 was 54% lower than an all-time high of 14,164.53 set a year and a half earlier. The S&P 500, which had peaked on the same day as the Dow in 2007, reached its bear-market low point on the same day as the Dow as well. Its closing price of 676.53 had last been seen in the fall of 1996.
How did the market fall so far? Could it happen again? Below, you’ll find a timeline of the key events leading up to the bear-market low of 2009, which may help you better understand the unique economic situation that caused it and realize how unlikely we are to see a repeat performance anytime soon.
Timeline of a collapse Feb. 8, 2007: British bank HSBC warns of $10.5 billion in potential losses at its U.S. mortgage arm as a result of the housing slowdown. The Dow closes at 12,637.63, down 0.2%.
Feb. 27, 2007:Freddie Mac ceases its purchases of the riskiest subprime mortgages and mortgage-backed securities. The Dow closes at 12,216.24, down 3.3%.
April 2, 2007: Major subprime lender New Century Financial files for bankruptcy. The Dow closes at 12,382.30, up 0.2%.
July 24, 2007: Leading subprime lender Countrywide Financial, in a financial filing, warns of difficult housing and mortgage conditions for the rest of 2007. The Dow closes at 13,716.95, down 1.6%.
July 31, 2007: Bear Sterns initiates bankruptcy proceedings for two of its mortgage-focused hedge funds. The Dow closes at 13.211.99, down 1.1%.
Aug. 9, 2007: European bank BNP Paribas suspends redemptions on three investment funds, leading to a credit crunch that forces the European Central Bank to inject roughly $135 billion into a number of banks on the continent. The Dow closes at 13,270.68, down 2.8%.
Aug. 10, 2007: The Federal Reserve makes its discount window ready to provide liquidity in the event of “dislocations in money and credit markets.” The Dow closes at 13,239.54, down 0.2%.
Aug. 16, 2007: Fitch downgrades Countrywide, which immediately draws its entire available credit line of $11.5 billion. The Dow closes at 12,845.78, down 0.1%.
Aug. 17, 2007: The Federal Reserve warns that “financial market conditions have deteriorated” and “the downside risks to growth have increased appreciably.” The Dow closes at 13,079.08, up 1.8%.
Oct. 9, 2007: The Dow reaches its peak of 14,164.53 points, up 0.9%. Investors ignore the warnings of low corporate-earnings growth and instead focus on the latest Fed meeting notes, which indicate another interest rate cut by year-end.
What if the two government-owned housing agencies that backstop so many of the nation’s mortgages ceased to exist? A new report from an influential think tank says that’s what should happen.
But while the plan isn’t quite as radical as it first sounds, if implemented it would mean a significant change if another housing bubble builds and bursts — a change that would have more of the risk falling onto individual homeowners instead of the federal government.
Among other things, the report recommends slowly winding down Fannie Mae and Freddie Mac — the government-owned housing agencies that had to be bailed out at great taxpayer expense after the most recent real-estate bust — and replacing them with what the report’s authors call the “Public Guarantor.”
Taking the heat off taxpayers and putting it on homeowners
As the name suggests, the Public Guarantor would serve a similar function as Fannie and Freddie, but with a twist that would take the heat off the taxpayer in the event of another catastrophic housing-market event, like the one we saw in 2007.
Right now, Fannie and Freddie buy mortgages originated by the nation’s banks, package them up into mortgage-backed securities, and sell them to investors. In return, Fannie and Freddie pay interest on the securities back to the investors.
But unlike Fannie and Freddie, the Public Guarantor wouldn’t buy mortgages or issue mortgage-backed securities. The private sector would now handle that. And in the event of another burst housing bubble, the Public Guarantor would only guarantee investors their interest payments and the return of their initial investments.
This guarantee would only be triggered after the private capital in line ahead of it had been exhausted. Specifically, the government would be fourth in line to take a loss, which means, of course, the taxpayer is also fourth in line.
Mission accomplished, right? Yes, but it’s a double-edged sword.
Goliath Wins This Match, for David’s Own Good
While it’s great that the taxpayer is less on the hook for mortgage-market trouble, that default risk has to land somewhere.
With this new plan, part of that somewhere is back onto the borrower, who would be first in line to take the hit if the Public Guarantor guarantee is ever triggered. Next in line after borrowers are private-credit enhancers and finally the corporate resources of mortgage issuers and servicers.
So in the end, under this proposed plan the government would only be giving an ironclad guarantee to investors in privately issued mortgage-backed securities.
