| Author | Message | ||
     Manchi_kurradu Junior Artist Username: Manchi_kurradu Post Number: 852 Registered: 07-2011 Posted From: 99.244.154.173 Rating: N/A |
for a second... gaali gaadiki jagan bail kosam try chesinatlu anukunna.. | ||
| Ashton Hero Username: Ashton Post Number: 12820 Registered: 05-2008 Posted From: 64.20.45.178 Rating: N/A |
http://www.cnbc.com/id/44553828 Late yesterday the chairman of the House Oversight and Government Reform Committee, Darrell Issa, sent out a press release titled, "Is Fannie Mae's Purchase of Troubled B of A Portfolio a Back-Door Bailout?" The answer is: No…but let me go back a bit. Issa's release begins: "Fannie Mae, the government sponsored enterprise bailed out with billions in taxpayer dollars has agreed to buy a portfolio of high risk, deteriorating value loans from Bank of America [BAC 7.23 -0.10 (-1.36%) ]." Issa goes on to announce his investigation into the matter and request "a full explanation" from Fannie Mae's conservator, the Federal Housing Finance Agency (FHFA) and its acting director Ed DeMarco. Now here's where it gets tricky. Issa's release continues: "In a letter sent to DeMarco today, Issa said Fannie Mae’s purchase of mortgage servicing rights from Bank of America is worrisome because as a government-backed enterprise Fannie Mae does not traditionally service mortgages. He also pointed out that the transaction likely shifted to Fannie Mae a significant amount of risk previously held by B of A." It is correct that Fannie Mae does not service mortgages; it is incorrect that the purchase of these servicing rights would shift risk to Fannie Mae. Fannie Mae isn't buying the loans, they're buying the servicing rights. The loans are securitized in mortgage-backed securities (MBS), and Fannie Mae already guarantees the loans. Yes, these are high-risk loans, and yes Fannie Mae is already on the hook for them, regardless of who is servicing them. These loans are not on B of A's books, B of A just owned the servicing rights. |
