打包下載：
Download Link: http://w16.easy-share.com/1699885778.html
2008年3月18日 星期二
2008年3月1日 星期六
Risks seen for growing Fannie, Freddie
WASHINGTON (AP) - Loosening the regulatory reins around Fannie Mae and Freddie Mac gives them the freedom to play a bigger role in trying to stabilize a worsening housing market.
The danger, some analysts say, is that the government-sponsored mortgage titans will become saddled with too much financial risk.
Fannie and Freddie this week reported fourth-quarter losses totaling $6.1 billion and predicted multibillion-dollar losses throughout 2008. Yet despite their financial troubles and the shakiness of the U.S. housing market, the government is making it easier for Fannie and Freddie to take on additional home-loan debt, something the companies have sought for months.
First they won the right -- as part of a bipartisan economic stimulus package -- to buy and guarantee mortgages above the traditional $417,000 limit. Then -- as a reward for filing timely financial statements following multibillion-dollar accounting scandals -- the companies were freed of a combined $1.5 trillion cap on their mortgage-investment holdings. Their regulator also raised the possibility of relaxing a mandated capital cushion Fannie and Freddie must keep in reserve.
While members of Congress and the Bush administration are hopeful these changes will enable Fannie and Freddie to help stem the housing downturn, some financial experts believe it is irresponsible to encourage the No. 1 and No. 2 mortgage finance companies to grow at this point in time.
Asked about the potential risks from being allowed to expand, the companies point to their mortgage portfolios currently being tens of billions below the now-expiring $746 billion limit. Without an easing of the risk capital level, they say, it is difficult for them to purchase as many mortgages as desirable to help the market.
"We have consistently shown that we operate in a very safe and prudent manner," said Freddie spokeswoman Sharon McHale. Fannie spokeswoman Amy Bonitatibus declined to comment.
Nobody is suggesting that Fannie and Freddie are on the verge of failure anytime soon. Some on Wall Street are even cheering the companies efforts to gain market share at a time when smaller lenders are retreating.
That said, there is concern among some experts that they have grown too large and could endanger the financial system if they were to totter or fail.
"Neither of these organizations has enough capital to cover their risk, and they know it," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics, a firm based in Torrance, Calif. "I m concerned about solvency for these entities."
Congress created Fannie during the Depression and Freddie in 1970 to keep money flowing into the home-loan market by buying up mortgages and bundling them into securities for sale to investors worldwide -- thereby making home ownership affordable for low- and middle-income Americans.
Today the companies hold or guarantee around $4.9 trillion in home-loan debt, though under a 1992 law they are required to hold in reserve against risk only a fraction of what is mandated for commercial banks.
While the Treasury Department isn t obligated to assist Fannie or Freddie in a financial emergency, there is a perceived notion on Wall Street that the government would bail them out in the event of a collapse. The idea that they are "too big to fail" enables the two companies to borrow relatively cheaply on global markets by issuing hundreds of billions of dollars in top-rated securities backed by mortgages.
This implicit government backing worries some analysts.
"Fannie and Freddie are really, really big. These recent changes make them even bigger," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "At some point they become too big to save."
Rating agency Moody s Investors Service this week said it may lower its assessment of Fannie s financial strength -- a rating that measures the likelihood that a financial institution will require assistance from an outside party such as shareholders or the government.
For now Fannie and Freddie likely will operate -- even with the freed-up portfolios -- largely as packagers and resellers of mortgage securities as opposed to holding them in the portfolios, analysts say. That business helps provide funding to prospective home buyers and generates tidy fees for the companies.
The director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart, said this week that the agency will discuss with Fannie and Freddie executives "the gradual decreasing" of the 30 percent capital cushion they must hold in reserve against risk.
The restriction means Fannie and Freddie must put billions into reserve as capital that they otherwise would be able to use to buy more mortgages.
For critics, freeing up more capital for the companies investment portfolios would make them more dangerous.
"We should be increasing their capital requirement, not loosening it," Sen. Chuck Hagel, R-Neb., said in a statement.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The danger, some analysts say, is that the government-sponsored mortgage titans will become saddled with too much financial risk.
Fannie and Freddie this week reported fourth-quarter losses totaling $6.1 billion and predicted multibillion-dollar losses throughout 2008. Yet despite their financial troubles and the shakiness of the U.S. housing market, the government is making it easier for Fannie and Freddie to take on additional home-loan debt, something the companies have sought for months.
First they won the right -- as part of a bipartisan economic stimulus package -- to buy and guarantee mortgages above the traditional $417,000 limit. Then -- as a reward for filing timely financial statements following multibillion-dollar accounting scandals -- the companies were freed of a combined $1.5 trillion cap on their mortgage-investment holdings. Their regulator also raised the possibility of relaxing a mandated capital cushion Fannie and Freddie must keep in reserve.
While members of Congress and the Bush administration are hopeful these changes will enable Fannie and Freddie to help stem the housing downturn, some financial experts believe it is irresponsible to encourage the No. 1 and No. 2 mortgage finance companies to grow at this point in time.
Asked about the potential risks from being allowed to expand, the companies point to their mortgage portfolios currently being tens of billions below the now-expiring $746 billion limit. Without an easing of the risk capital level, they say, it is difficult for them to purchase as many mortgages as desirable to help the market.
"We have consistently shown that we operate in a very safe and prudent manner," said Freddie spokeswoman Sharon McHale. Fannie spokeswoman Amy Bonitatibus declined to comment.
Nobody is suggesting that Fannie and Freddie are on the verge of failure anytime soon. Some on Wall Street are even cheering the companies efforts to gain market share at a time when smaller lenders are retreating.
That said, there is concern among some experts that they have grown too large and could endanger the financial system if they were to totter or fail.
"Neither of these organizations has enough capital to cover their risk, and they know it," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics, a firm based in Torrance, Calif. "I m concerned about solvency for these entities."
Congress created Fannie during the Depression and Freddie in 1970 to keep money flowing into the home-loan market by buying up mortgages and bundling them into securities for sale to investors worldwide -- thereby making home ownership affordable for low- and middle-income Americans.
Today the companies hold or guarantee around $4.9 trillion in home-loan debt, though under a 1992 law they are required to hold in reserve against risk only a fraction of what is mandated for commercial banks.
While the Treasury Department isn t obligated to assist Fannie or Freddie in a financial emergency, there is a perceived notion on Wall Street that the government would bail them out in the event of a collapse. The idea that they are "too big to fail" enables the two companies to borrow relatively cheaply on global markets by issuing hundreds of billions of dollars in top-rated securities backed by mortgages.
This implicit government backing worries some analysts.
"Fannie and Freddie are really, really big. These recent changes make them even bigger," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "At some point they become too big to save."
Rating agency Moody s Investors Service this week said it may lower its assessment of Fannie s financial strength -- a rating that measures the likelihood that a financial institution will require assistance from an outside party such as shareholders or the government.
For now Fannie and Freddie likely will operate -- even with the freed-up portfolios -- largely as packagers and resellers of mortgage securities as opposed to holding them in the portfolios, analysts say. That business helps provide funding to prospective home buyers and generates tidy fees for the companies.
The director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart, said this week that the agency will discuss with Fannie and Freddie executives "the gradual decreasing" of the 30 percent capital cushion they must hold in reserve against risk.
The restriction means Fannie and Freddie must put billions into reserve as capital that they otherwise would be able to use to buy more mortgages.
For critics, freeing up more capital for the companies investment portfolios would make them more dangerous.
"We should be increasing their capital requirement, not loosening it," Sen. Chuck Hagel, R-Neb., said in a statement.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
華爾街股市 - 收市跌逾2.5% / 全月跌3-5%
紐約 (XFN-ASIA) - 美國國際集團(AIG)和戴爾電腦(Dell Inc.)業績欠佳, 加上經濟數據表現疲弱, 拖累周五美股大幅下挫。 道指收跌315.79點或2.51%, 報12,266.39, 30家成分股全線滑落; 納指收跌60.09點或2.58%, 報2,271.48; 標普500指數收跌37.05點或2.71%, 報1,330.63。 投資者沽出美股, 轉投債市, 推動美國國債價格大幅上升。基準10年期國債孳息由周四的3.67%, 跌至3.52%。 芝加哥期權交易所的波動指數VIX急升12.5%, 該指數向被稱做「恐慌指數」。 周五出爐的數據顯示, 2月份芝加哥採購經理指數(PMI)由1月份的51.5, 跌至44.5, 遠遜於市場預期的50.0。 這是該指數自去年2月份以來首次跌至50以下。指數低於50代表該區製造業活動萎縮。 該數據暗示, 美國供應管理學會(ISM)定於下周一公布的全美製造業指數前景不妙。 另外, 根據商務部公布的數據, 美國1月份名義個人消費開支上升0.4%, 升幅超出12月份的0.3%和市場預期的0.2%。 但經通脹調整的實質個人消費開支連續第二個月持平, 顯示民間消費意願疲弱, 可能導致經濟進一步放緩。 1月份個人收入上升0.3%, 升幅大於市場預期的0.2%, 但小於12月份的0.5%。 密歇根大學和路透社聯合公布的調查報告稱, 美國2月份消費情緒指數由初估的69.6, 上修至70.8。 2月份指數高於市場預期的70.0, 但仍低於1月份的78.4。 AIG周四收盤後公布, 末季虧損52.9億美元, 主要因其信用違約交換合約(CDS)投資的價值萎縮逾110億美元。分析師之前大多預期該公司將錄得盈利。AIG收跌6.6%, 為道指全日跌幅最大的成分股。 戴爾末季純利跌逾6%, 遜於市場預期。該公司警告稱, 消費者在開支上更加保守恐將對其業績產生不利影響。戴爾收跌4.6%。 其他企業消息中, 億萬富翁投資者Wilbur Ross同意向債券保險商Assured Guaranty投資最多10億美元資金。Assured Guaranty逆市上揚12.6%。 道指全周跌0.93%; 納指跌1.38%; 標普500指數跌1.66%。 道指全月跌3.04%; 納指跌4.95%; 標普500指數跌3.48%。 ds
Verizon finishes broadband expansion
AUGUSTA, Maine (AP) - Verizon has completed work on a major infrastructure expansion that extends broadband Internet service to more than 30,000 customers in unserved or underserved portions of the state.
The Public Utilities Commission said the work represents Verizon s fulfillment of a plan approved by regulators last summer. Under the agreement, Verizon is barred from passing the costs of the project onto FairPoint Communications as part of its takeover of Verizon landlines in Maine.
The new high-speed Digital Subscriber Line, or DSL, service is spread across dozens of large and small communities, including St. Agatha, Wells, Cranberry Isles and portions of Portland.
The expansion increases to 70 percent the proportion of Verizon landline customers in Maine with high-speed Internet access.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The Public Utilities Commission said the work represents Verizon s fulfillment of a plan approved by regulators last summer. Under the agreement, Verizon is barred from passing the costs of the project onto FairPoint Communications as part of its takeover of Verizon landlines in Maine.
The new high-speed Digital Subscriber Line, or DSL, service is spread across dozens of large and small communities, including St. Agatha, Wells, Cranberry Isles and portions of Portland.
The expansion increases to 70 percent the proportion of Verizon landline customers in Maine with high-speed Internet access.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Big banks must give mortgage details
WASHINGTON (AP) - Nine large banks must provide detailed information on mortgage delinquencies and foreclosures every month to a federal regulator.
The Office of the Comptroller of the Currency said Friday it wants to take a closer look at the performance of loans among the banks that it regulates.
It is requiring the information from Citigroup Inc., Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., US Bancorp, National City Corp. HSBC Plc and First Horizon National Corp., an agency spokesman said.
Those banks are large players in the business of loan servicing -- collecting and distributing mortgage payments. They will be required to submit results for October 2007 through February by March 31.
The regulator wants the information "in order to assure that we have a detailed picture of the activities of national bank servicers and the performance of loans serviced by them," Comptroller of the Currency John C. Dugan said in a statement. Dugan said regulators met with bank officials earlier this month and were "pleased with the level of cooperation."
Dugan also said the effort will be coordinated with the Bush Administration s effort to stem foreclosures, dubbed "Hope Now."
The agency is looking for information on all loans, not just subprime loans made to borrowers with poor credit. Information will include detailed reports on loan modifications, credit scores, foreclosures and delinquencies, said the spokesman, Robert Garsson.
While the agency has full-time examiners at large banks that are familiar with such data, the agency has not compiled the information before, he said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The Office of the Comptroller of the Currency said Friday it wants to take a closer look at the performance of loans among the banks that it regulates.
It is requiring the information from Citigroup Inc., Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., US Bancorp, National City Corp. HSBC Plc and First Horizon National Corp., an agency spokesman said.
Those banks are large players in the business of loan servicing -- collecting and distributing mortgage payments. They will be required to submit results for October 2007 through February by March 31.
The regulator wants the information "in order to assure that we have a detailed picture of the activities of national bank servicers and the performance of loans serviced by them," Comptroller of the Currency John C. Dugan said in a statement. Dugan said regulators met with bank officials earlier this month and were "pleased with the level of cooperation."
Dugan also said the effort will be coordinated with the Bush Administration s effort to stem foreclosures, dubbed "Hope Now."
The agency is looking for information on all loans, not just subprime loans made to borrowers with poor credit. Information will include detailed reports on loan modifications, credit scores, foreclosures and delinquencies, said the spokesman, Robert Garsson.
While the agency has full-time examiners at large banks that are familiar with such data, the agency has not compiled the information before, he said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Hiring slower, Pa. still in the black
HARRISBURG, Pa. (AP) - With the national economy sputtering, Pennsylvania s job growth last year was even slower than originally thought, although the state s bigger-than-expected tax collection through Friday has kept the red ink at bay.
Pennsylvania s economic indicators are being closely watched for signs of job losses or a looming deficit since the federal government reported 35,000 fewer jobs in December and January combined and just about every other northeastern state is projecting a deficit.
"Right now, while the Pennsylvania economy is holding up fairly well, there are some stress lines emerging," said economist Ryan Sweet of Moody s Economy.com.
He added that this year "is going to be a struggle."
Government work force analysts revised last year s hiring numbers downward by 14,000 jobs, a correction that means Pennsylvania added just 25,000 jobs in 2007, or fewer than half the amount added during each of the three preceding years.
The revision was a routine correction made at the end of every year to reflect tax records, instead of the survey data that is released month-to-month.
The difference is not substantial enough to change a 2008 outlook that expects very sluggish, if any, growth in Pennsylvania, said James Diffley of the economic-forecasting firm Global Insight.
Despite the stagnant hiring elsewhere, Pennsylvania added 3,000 jobs in January, according to figures released Thursday.
The state s biggest boost has come from the health care industry, which added 40,000 jobs last year as hospitals and outpatient surgery centers expanded. The manufacturing sector, which Pennsylvania relies on more heavily than the rest of the nation, continued to hemorrhage jobs, losing nearly 20,000 in 2007.
On Friday, the state Revenue Department said it collected $90 million more than projected in February for the state s main bank account. As a result, the state is carrying a $290 million surplus into March and April, the two biggest revenue-collection months of the year.
In testimony Monday in front of the Senate Appropriations Committee, Gov. Ed Rendell s budget secretary, Michael Masch, said he was reasonably confident that the state will finish the fiscal year in the black.
Rendell s proposed $28.3 billion budget for the fiscal year beginning July 1 is counting on any slowdown being brief. The budget would increase spending by $1.1 billion, or 4.2 percent, largely driven by the demands of public schools, prisons and health care for the poor and elderly, Masch said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Pennsylvania s economic indicators are being closely watched for signs of job losses or a looming deficit since the federal government reported 35,000 fewer jobs in December and January combined and just about every other northeastern state is projecting a deficit.
"Right now, while the Pennsylvania economy is holding up fairly well, there are some stress lines emerging," said economist Ryan Sweet of Moody s Economy.com.
He added that this year "is going to be a struggle."
Government work force analysts revised last year s hiring numbers downward by 14,000 jobs, a correction that means Pennsylvania added just 25,000 jobs in 2007, or fewer than half the amount added during each of the three preceding years.
The revision was a routine correction made at the end of every year to reflect tax records, instead of the survey data that is released month-to-month.
The difference is not substantial enough to change a 2008 outlook that expects very sluggish, if any, growth in Pennsylvania, said James Diffley of the economic-forecasting firm Global Insight.
Despite the stagnant hiring elsewhere, Pennsylvania added 3,000 jobs in January, according to figures released Thursday.
The state s biggest boost has come from the health care industry, which added 40,000 jobs last year as hospitals and outpatient surgery centers expanded. The manufacturing sector, which Pennsylvania relies on more heavily than the rest of the nation, continued to hemorrhage jobs, losing nearly 20,000 in 2007.
On Friday, the state Revenue Department said it collected $90 million more than projected in February for the state s main bank account. As a result, the state is carrying a $290 million surplus into March and April, the two biggest revenue-collection months of the year.
In testimony Monday in front of the Senate Appropriations Committee, Gov. Ed Rendell s budget secretary, Michael Masch, said he was reasonably confident that the state will finish the fiscal year in the black.
Rendell s proposed $28.3 billion budget for the fiscal year beginning July 1 is counting on any slowdown being brief. The budget would increase spending by $1.1 billion, or 4.2 percent, largely driven by the demands of public schools, prisons and health care for the poor and elderly, Masch said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
諾斯洛普和EADS獲美國防部加油機合約
華盛頓 (XFN-ASIA) - 美國空軍周五宣布, 國防承包商諾斯洛普(Northrop Grumman)和空中巴士母公司EADS成功標得美國國防部一項總值350億美元的加油機合約。 市場原先認為, 波音更有希望獲得這項為期10-15年的合約。波音近50年來一直在為美國防部供應加油機。 美空軍之前估計, 該合約總值300-400億美元。美空軍計劃全部更換近600架加油機, 除此項合約外, 未來還將有兩項合約, 預計總價值將高達1,000億美元, 期限達30年。 波音股價在盤後交易中下跌3.3%, 報80.02美元; 諾斯洛普升6%, 報83.35美元。 yzl/ds
紐約港股 - 匯控報117.09港元 / 中移動報116.11港元
香港 (XFN-ASIA) - 以ADR(美國預托證券)形式於紐約上市的港股隔夜收市表現: 匯控ADR跌2.19或2.83%, 報75.25美元, 折合為每股117.09港元, 較香港收市價120.70跌3.61港元。 中移動ADR跌1.88或2.46%, 報74.62美元, 折合為每股116.11港元, 較香港收市價120.00跌3.89港元。 中國聯通ADR跌1.35或5.98%, 報21.23美元, 折合為每股16.52港元, 較香港收市價17.14跌0.62港元。 中國人壽ADR跌2.31或3.83%, 報58.08美元, 折合為每股30.12港元, 較香港收市價31.45跌1.33港元。 中國電信ADR跌2.69或3.53%, 報73.41美元, 折合為每股5.71港元, 較香港收市價5.95跌0.24港元。 中國鋁業ADR跌2.20或4.32%, 報48.70美元, 折合為每股15.16港元, 較香港收市價15.70跌0.54港元。 中海油ADR跌5.53或3.23%, 報165.77美元, 折合為每股12.90港元, 較香港收市價13.42跌0.52港元。 中石化ADR跌4.67或4.09%, 報109.44美元, 折合為每股8.51港元, 較香港收市價8.85跌0.34港元。 中石油ADR跌6.46或4.21%, 報146.82美元, 折合為每股11.42港元, 較香港收市價11.84跌0.42港元。 ds
Gov t taps banks for mortgage details
WASHINGTON (AP) - Concerned about the mounting foreclosures, a federal banking regulator is mandating that nine large banks provide detailed information on mortgage delinquencies and foreclosures every month.
The Office of the Comptroller of the Currency said Friday it wants to take a closer look at the performance of loans among the banks that it regulates.
It is requiring the information from Citigroup Inc., Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., US Bancorp, National City Corp. HSBC Plc and First Horizon National Corp., an agency spokesman said.
Those banks are large players in the business of loan servicing -- collecting and distributing mortgage payments. They will be required to submit results for October 2007 through February by March 31.
The regulator wants the information "in order to assure that we have a detailed picture of the activities of national bank servicers and the performance of loans serviced by them," Comptroller of the Currency John C. Dugan said in a statement. Dugan said regulators met with bank officials earlier this month and were "pleased with the level of cooperation."
Dugan also said the effort will be coordinated with the Bush administration s effort to stem foreclosures, dubbed "Hope Now."
The agency is looking for information on all loans, not just subprime loans made to borrowers with poor credit. Information will include detailed reports on loan modifications, credit scores, foreclosures and delinquencies, said the spokesman, Robert Garsson.
While the ageny has full-time examiners at large banks that are familiar with such data, the agency has not compiled the information before, he said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The Office of the Comptroller of the Currency said Friday it wants to take a closer look at the performance of loans among the banks that it regulates.
It is requiring the information from Citigroup Inc., Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., US Bancorp, National City Corp. HSBC Plc and First Horizon National Corp., an agency spokesman said.
Those banks are large players in the business of loan servicing -- collecting and distributing mortgage payments. They will be required to submit results for October 2007 through February by March 31.
The regulator wants the information "in order to assure that we have a detailed picture of the activities of national bank servicers and the performance of loans serviced by them," Comptroller of the Currency John C. Dugan said in a statement. Dugan said regulators met with bank officials earlier this month and were "pleased with the level of cooperation."
Dugan also said the effort will be coordinated with the Bush administration s effort to stem foreclosures, dubbed "Hope Now."
The agency is looking for information on all loans, not just subprime loans made to borrowers with poor credit. Information will include detailed reports on loan modifications, credit scores, foreclosures and delinquencies, said the spokesman, Robert Garsson.
While the ageny has full-time examiners at large banks that are familiar with such data, the agency has not compiled the information before, he said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Risks seen for growing Fannie, Freddie
WASHINGTON (AP) - Loosening the regulatory reins around Fannie Mae and Freddie Mac gives them the freedom to play a bigger role in trying to stabilize a worsening housing market.
The danger, some analysts say, is that the government-sponsored mortgage titans will become saddled with too much financial risk.
Fannie and Freddie this week reported fourth-quarter losses totaling $6.1 billion and predicted multibillion-dollar losses throughout 2008. Yet despite their financial troubles and the shakiness of the U.S. housing market, the government is making it easier for Fannie and Freddie to take on additional home-loan debt, something the companies have sought for months.
First they won the right -- as part of a bipartisan economic stimulus package -- to buy and guarantee mortgages above the traditional $417,000 limit. Then -- as a reward for filing timely financial statements following multibillion-dollar accounting scandals -- the companies were freed of a combined $1.5 trillion cap on their mortgage-investment holdings. Their regulator also raised the possibility of relaxing a mandated capital cushion Fannie and Freddie must keep in reserve.
While members of Congress and the Bush administration are hopeful these changes will enable Fannie and Freddie to help stem the housing downturn, some financial experts believe it is irresponsible to encourage the No. 1 and No. 2 mortgage finance companies to grow at this point in time.
Asked about the potential risks from being allowed to expand, the companies point to their mortgage portfolios currently being tens of billions below the now-expiring $746 billion limit. Without an easing of the risk capital level, they say, it is difficult for them to purchase as many mortgages as desirable to help the market.
"We have consistently shown that we operate in a very safe and prudent manner," said Freddie spokeswoman Sharon McHale. Fannie spokeswoman Amy Bonitatibus declined to comment.
Nobody is suggesting that Fannie and Freddie are on the verge of failure anytime soon. Some on Wall Street are even cheering the companies efforts to gain market share at a time when smaller lenders are retreating.
That said, there is concern among some experts that they have grown too large and could endanger the financial system if they were to totter or fail.
"Neither of these organizations has enough capital to cover their risk, and they know it," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics, a firm based in Torrance, Calif. "I m concerned about solvency for these entities."
Congress created Fannie during the Depression and Freddie in 1970 to keep money flowing into the home-loan market by buying up mortgages and bundling them into securities for sale to investors worldwide -- thereby making home ownership affordable for low- and middle-income Americans.
Today the companies hold or guarantee around $4.9 trillion in home-loan debt, though under a 1992 law they are required to hold in reserve against risk only a fraction of what is mandated for commercial banks.
While the Treasury Department isn t obligated to assist Fannie or Freddie in a financial emergency, there is a perceived notion on Wall Street that the government would bail them out in the event of a collapse. The idea that they are "too big to fail" enables the two companies to borrow relatively cheaply on global markets by issuing hundreds of billions of dollars in top-rated securities backed by mortgages.
This implicit government backing worries some analysts.
"Fannie and Freddie are really, really big. These recent changes make them even bigger," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "At some point they become too big to save."
Rating agency Moody s Investors Service this week said it may lower its assessment of Fannie s financial strength -- a rating that measures the likelihood that a financial institution will require assistance from an outside party such as shareholders or the government.
For now Fannie and Freddie likely will operate -- even with the freed-up portfolios -- largely as packagers and resellers of mortgage securities as opposed to holding them in the portfolios, analysts say. That business helps provide funding to prospective home buyers and generates tidy fees for the companies.
The director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart, said this week that the agency will discuss with Fannie and Freddie executives "the gradual decreasing" of the 30 percent capital cushion they must hold in reserve against risk.
The restriction means Fannie and Freddie must put billions into reserve as capital that they otherwise would be able to use to buy more mortgages.
For critics, freeing up more capital for the companies investment portfolios would make them more dangerous.
"We should be increasing their capital requirement, not loosening it," Sen. Chuck Hagel, R-Neb., said in a statement.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The danger, some analysts say, is that the government-sponsored mortgage titans will become saddled with too much financial risk.
Fannie and Freddie this week reported fourth-quarter losses totaling $6.1 billion and predicted multibillion-dollar losses throughout 2008. Yet despite their financial troubles and the shakiness of the U.S. housing market, the government is making it easier for Fannie and Freddie to take on additional home-loan debt, something the companies have sought for months.
First they won the right -- as part of a bipartisan economic stimulus package -- to buy and guarantee mortgages above the traditional $417,000 limit. Then -- as a reward for filing timely financial statements following multibillion-dollar accounting scandals -- the companies were freed of a combined $1.5 trillion cap on their mortgage-investment holdings. Their regulator also raised the possibility of relaxing a mandated capital cushion Fannie and Freddie must keep in reserve.
While members of Congress and the Bush administration are hopeful these changes will enable Fannie and Freddie to help stem the housing downturn, some financial experts believe it is irresponsible to encourage the No. 1 and No. 2 mortgage finance companies to grow at this point in time.
Asked about the potential risks from being allowed to expand, the companies point to their mortgage portfolios currently being tens of billions below the now-expiring $746 billion limit. Without an easing of the risk capital level, they say, it is difficult for them to purchase as many mortgages as desirable to help the market.
"We have consistently shown that we operate in a very safe and prudent manner," said Freddie spokeswoman Sharon McHale. Fannie spokeswoman Amy Bonitatibus declined to comment.
Nobody is suggesting that Fannie and Freddie are on the verge of failure anytime soon. Some on Wall Street are even cheering the companies efforts to gain market share at a time when smaller lenders are retreating.
That said, there is concern among some experts that they have grown too large and could endanger the financial system if they were to totter or fail.
"Neither of these organizations has enough capital to cover their risk, and they know it," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics, a firm based in Torrance, Calif. "I m concerned about solvency for these entities."
Congress created Fannie during the Depression and Freddie in 1970 to keep money flowing into the home-loan market by buying up mortgages and bundling them into securities for sale to investors worldwide -- thereby making home ownership affordable for low- and middle-income Americans.
Today the companies hold or guarantee around $4.9 trillion in home-loan debt, though under a 1992 law they are required to hold in reserve against risk only a fraction of what is mandated for commercial banks.
While the Treasury Department isn t obligated to assist Fannie or Freddie in a financial emergency, there is a perceived notion on Wall Street that the government would bail them out in the event of a collapse. The idea that they are "too big to fail" enables the two companies to borrow relatively cheaply on global markets by issuing hundreds of billions of dollars in top-rated securities backed by mortgages.
This implicit government backing worries some analysts.
"Fannie and Freddie are really, really big. These recent changes make them even bigger," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "At some point they become too big to save."
Rating agency Moody s Investors Service this week said it may lower its assessment of Fannie s financial strength -- a rating that measures the likelihood that a financial institution will require assistance from an outside party such as shareholders or the government.
For now Fannie and Freddie likely will operate -- even with the freed-up portfolios -- largely as packagers and resellers of mortgage securities as opposed to holding them in the portfolios, analysts say. That business helps provide funding to prospective home buyers and generates tidy fees for the companies.
The director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart, said this week that the agency will discuss with Fannie and Freddie executives "the gradual decreasing" of the 30 percent capital cushion they must hold in reserve against risk.
The restriction means Fannie and Freddie must put billions into reserve as capital that they otherwise would be able to use to buy more mortgages.
For critics, freeing up more capital for the companies investment portfolios would make them more dangerous.
"We should be increasing their capital requirement, not loosening it," Sen. Chuck Hagel, R-Neb., said in a statement.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
訂閱：
文章 (Atom)