Google+
Home | Daily Dose | The Week Ahead: The GSEs and Their Dwindling Capital Buffer
Print This Post Print This Post

The Week Ahead: The GSEs and Their Dwindling Capital Buffer

Fannie-Freddie-logos-twoThe mortgage industry has been buzzing since mid-February when FHFA Director Mel Watt announced in a speech at the Bipartisan Center that there were risks that were certain to escalate the longer the GSEs remained in conservatorship, namely the requirement to lower the GSEs' capital buffer to zero by January 1, 2018.

With bad news all around in the Q1 earnings statements reported in the last two weeks, punctuated by a $111.2 million net loss for Ocwen, the mortgage industry is anxiously awaiting the first quarter financial results for Freddie Mac and Fannie Mae, which will be released on Tuesday, May 3, and Thursday, May 5, respectively.

The FHFA’s conservatorship of Fannie Mae and Freddie Mac remains a controversial topic due to the possibility of another draw on Treasury (i.e. another taxpayer-funded bailout). The GSEs returned to profitability in 2012, four years after they received a $187.5 billion bailout from taxpayers, but the ability of the GSEs to remain profitable has been questioned by lawmakers and other stakeholders. Last quarter, Freddie Mac answered the question—at least for now—by reporting a net income of $6.4 billion for the full-year 2015 in the Enterprise’s Q4 and full-year 2015 Earnings Report.

Though 2015 was Freddie Mac's fourth consecutive year of profitability, Freddie Mac's 2015 net income of $6.4 billion was a 17 percent decline from 2014 and an even larger decline from 2013's net income of $48.7 billion. The year 2015 was a volatile one for Freddie Mac's earnings—the net income for Q4 was $2.2 billion following a $475 million loss for Q3.

The loss in Q3 2015 for Freddie Mac—which was its first quarterly loss in nearly four years—was mostly due to losses on interest rate derivatives, which Freddie Mac uses as a hedge against changes in interest rates. The value of interest rate derivatives can fluctuate dramatically, however.

Fannie Mae, which relies more on issuance of longer-term debt in order to protect itself against interest rate changes, reported a net income of $2.5 billion for the fourth quarter and $11 billion for the full year of 2015. While Fannie Mae was profitable in 2015 for the fourth straight year, like with Freddie Mac, the profits have been steadily shrinking each year—the $11 billion net income was only a fraction of the $84 billion net income reported for 2013.

The Watt speech in February, the diminishing capital buffer for the GSEs, and the steady decline in GSE profits in the last three years has fueled conjecture that the GSEs will soon need another draw on Treasury. In fact, a blogpost on MarketWatch written by Andrea Riquier entitled “Freddie Mac May Need Another Taxpayer Bailout Next Week” examines the possibility. Riquier reported that Moody's Analytics Chief Economist Mark Zandi said the possibility of Freddie Mac taking a draw on Treasury during Q1 to be “less than 50-50.”

Key figures in the Obama Administration have said that the GSEs will not be recapitalized and released from conservatorship while Obama is president, but the possibility of GSE reform has been back on the minds of many since Watt's speech. The Urban Institute recently published a series of essays on housing finance reform written by economists and other analysts.

Employment Situation for April 2016—Friday, May 6, at 8:30 a.m. EST

All eyes will be on the Bureau of Labor Statistics' Employment Situation for April to see if the gains the labor market has experienced in the last few months will continue or if they will take a step back. Job gains bounced back in February and March after weak January numbers and have now averaged 209,000 per month in the last three months. In March, the unemployment rate ticked back up to 5.0 percent after a couple of sub-5 percent months.

The Fed will no doubt be watching the employment numbers closely in order to determine whether or not to raise the federal funds target rate in June. There will be one additional employment situation released before the next Federal Open Market Committee meeting, which will be June 14 and 15.

Tuesday, May 3, 2016
Freddie Mac Q1 2016 Financial Results, 7:30 a.m. EST

Thursday, May 5, 2016
Fannie Mae Q1 2016 Financial Results, 7:30 a.m. EST

Friday, May 6, 2016
BLS Employment Situation for April 2016, 8:30 a.m. EST

About Author: Brian Honea

Brian Honea
Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

280 comments

  1. Pingback: The Week Ahead: The GSEs and Their Dwindling Capital - Appraisal Buzz

  2. Pingback: The Week Ahead: The GSEs and Their Dwindling Capital - Brokers TitleBrokers Title

  3. Pingback: cnwy54wy54wy54wy5435te4c5t34

  4. Pingback: binge drinking alcoholism

  5. Pingback: دانلود قسمت هشتم شهرزاد دوم

  6. Pingback: دانلود شهرزاد قسمت هفتم فصل دوم

  7. Pingback: 3tnxyc3ut5x45wmtcy5454tnc3c

  8. Pingback: دانلود قسمت دهم فصل دوم شهرزاد

  9. Pingback: دانلود قسمت هفدهم عاشقانه

  10. Pingback: Violet Starr

  11. Pingback: Elsa Jean

  12. Pingback: Michelle Martinez

  13. Pingback: Dillion Harper

  14. Pingback: lesbian porn

  15. Pingback: Boom lift repair miami

  16. Pingback: real money casino games slots

  17. Pingback: دانلود قسمت 12 عاشقانه

  18. Pingback: سریال عاشقانه

  19. Pingback: Hunde tshirts

  20. Pingback: Loyola College for Sale

  21. Pingback: دانلود قسمت یازدهم شهرزاد دوم

  22. Pingback: دانلود قسمت پنجم شهرزاد دوم

  23. Pingback: دانلود قسمت سیزده عاشقانه

  24. Pingback: under armour store

  25. Pingback: دانلود قسمت اول فصل دوم شهرزاد

  26. Pingback: Velva

  27. Pingback: porno gratis

  28. Pingback: porno

  29. Pingback: porno gratis

  30. Pingback: porno

  31. Pingback: porno

  32. Pingback: videos porno

  33. Pingback: porno gratis

  34. Pingback: porno gratis

  35. Pingback: قیمت پنجره دوجداره

  36. Pingback: پنجره دوجداره ویستابست

  37. Pingback: پنجره ضد سرقت المانی

  38. Pingback: آموزش پنجره دوجداره

  39. Pingback: Facial Spa Services Hillsboro Beach

  40. Pingback: Acne Facial Treatments Sea Ranch Lakes

  41. Pingback: Acne Facial Treatments Sunrise

  42. Pingback: Acne Facial Treatments Lauderhill

  43. Pingback: فروش توری

  44. Pingback: پنجره

  45. Pingback: دانلود قسمت پنجم شهرزاد

  46. Pingback: دانلود قسمت ششم شهرزاد دوم

  47. Pingback: accommodation search engine

  48. Pingback: Roof Repair Long Island

  49. Pingback: authentic cheap jordans

  50. Pingback: zynga poker chips

  51. Pingback: see website

  52. Pingback: clash royale generator

  53. Pingback: led strip lights

  54. Pingback: Agen Judi Casino Slots Resmi

  55. Pingback: پنجره دوجداره

  56. Pingback: coin-banks exchange

  57. Pingback: coin-banks exchange

  58. Pingback: DraftKings DFS

  59. Pingback: coin-banks trading

  60. Pingback: Porn

  61. Pingback: valuable vintage topps baseball cards

  62. Pingback: دانلود قسمت هشتم شهرزاد دوم

  63. Pingback: vigra master � bom

  64. Pingback: merci

  65. Pingback: titleist 917 driver australia

  66. Pingback: vpm

  67. Pingback: clash royale hack tool

  68. Pingback: دانلود شهرزاد قسمت 13

  69. Pingback: دانلود شهرزاد سیزده 13

  70. Pingback: casino blackjack

  71. Pingback: Social Media Marketing

  72. Pingback: 16 دانلود سریال شهرزاد

  73. Pingback: Furnace repair

  74. Pingback: Roofing Contractors Long Island

  75. Pingback: دانلود قسمت دوم سریال عالیجناب

  76. Pingback: دانلود عالیجناب اول 1

  77. Pingback: دانلود فیلم

  78. Pingback: دانلود فیلم ایرانی

  79. Pingback: دانلود عالیجناب دوم

  80. Pingback: game

  81. Pingback: brake repair

  82. Pingback: website

  83. Pingback: http://urladda.com/5J8T

  84. Pingback: پنجره ضد سرقت المانی

  85. Pingback: شرکت تولیدی پنجره دوجداره

  86. Pingback: دانلود فیلم

  87. Pingback: House Cleaning copperas cove TX

  88. Pingback: latest mobile phones

  89. Pingback: r�ussite

  90. Pingback: Surrey Limo

  91. Pingback: voucher codes

  92. Pingback: دانلود فیلم های روز

  93. Pingback: rent home

  94. Pingback: دانلود فیلم با کیفیت

  95. Pingback: درب یو پی وی سی

  96. Pingback: how to buy bitcoins

  97. Pingback: Double chambered

  98. Pingback: پنجره دوجداره

  99. Pingback: ключар

  100. Pingback: پنجره ضد سرقت

  101. Pingback: پنجره دوجداره

  102. Pingback: فروش توری پنجره دوجداره

  103. Pingback: پنجره

  104. Pingback: پنجره دوجداره

  105. Pingback: https://myspace.com/jorge.davidson

  106. Pingback: شرکت تولیدی پنجره دوجداره

  107. Pingback: مشاوره بازاریابی آنلاین

  108. Pingback: google ch porn

  109. Pingback: SEO Leeds

  110. Pingback: Mitch McConnell

  111. Pingback: garden bridges

  112. Pingback: grafisch.LinkMiner.nl

  113. Pingback: pop over to this site

  114. Pingback: Limo Services Vancouver BC

  115. Pingback: high flow showerhead

  116. Pingback: private proxy

  117. Pingback: edsheeran

  118. Pingback: window price

  119. Pingback: download best

  120. Pingback: دانلود

  121. Pingback: window

  122. Pingback: Yakima Web Designer

  123. Pingback: my site

  124. Pingback: instagram porn

  125. Pingback: Bad Spiderman

  126. Pingback: Bad Doctor

  127. Pingback: پنجره

  128. Pingback: فیلم

  129. Pingback: قیمت پنجره دوجداره

  130. Pingback: پنجره

  131. Pingback: پنجره

  132. Pingback: Learn Colors for Kids

  133. Pingback: garden

  134. Pingback: liposomalna witamina c sklep

  135. Pingback: garden bridges

  136. Pingback: Seo

  137. Pingback: Polecam

  138. Pingback: unique gifts for him

  139. Pingback: usi-tech

  140. Pingback: restauração auditiva

  141. Pingback: aqui

  142. Pingback: live sex cams

  143. Pingback: dish

  144. Pingback: tiered divided

  145. Pingback: vegas online casinos

  146. Pingback: karajupvc

  147. Pingback: upvc window

  148. Pingback: download

  149. Pingback: پنجره دوجداره

  150. Pingback: download

  151. Pingback: دانلود

  152. Pingback: دانلود فیلم

  153. Pingback: پنجره دوجداره

  154. Pingback: garden bridges california

  155. Pingback: real estate wordpress themes 2017

  156. Pingback: read now

  157. Pingback: watch movies online

  158. Pingback: Judi Togel

  159. Pingback: personnel consultancy

  160. Pingback: ht orgms of Scarlett J and Natalie P

  161. Pingback: highlighter vape pen

  162. Pingback: removal

  163. Pingback: buy porn collection google

  164. Pingback: vehicle shippers

  165. Pingback: دانلود فیلم نهنگ عنبر

  166. Pingback: youtube video

  167. Pingback: Bandar Bola

  168. Pingback: Judi Togel

  169. Pingback: https://www.behance.net/infob0324f42/followers

  170. Pingback: https://gitlab.com/JimStephens32

  171. Pingback: usuwanie dpf

  172. Pingback: click this

  173. Pingback: پنجره دوجداره

  174. Pingback: پنجره کرج

  175. Pingback: make taurus man fall in love with you

  176. Pingback: دانلود شهرزاد

  177. Pingback: دانلود فیلم رایگان

  178. Pingback: headhunting

  179. Pingback: دانلود آینه بغل

  180. Pingback: فیلم نهنگ عنبر

  181. Pingback: Nursing scarf

  182. Pingback: baby shower gifts

  183. Pingback: Stroller cover

  184. Pingback: Baby breastfeeding cover

  185. Pingback: real caller android

  186. Pingback: free porn app

  187. Pingback: Pas Cher Doudoune Canada Goose

  188. Pingback: SkinAlley

  189. Pingback: Segala Olahraga

  190. Pingback: missguided coupon code

  191. Pingback: Ausgesperrt

  192. Pingback: https://www.youtube.com/watch?v=GPJYH7LYunc

  193. Pingback: porn movie

  194. Pingback: site web

  195. Pingback: free android porn app

  196. Pingback: Agen Bola Selalu Terpercaya

  197. Pingback: checking this site

  198. Pingback: دانلود

  199. Pingback: i love my1 website

  200. Pingback: دانلود فیلم نهنگ عنبر 2

  201. Pingback: pirater un compte facebook

  202. Pingback: buy hacklink

  203. Pingback: Oddsmonkey

  204. Pingback: Oddsmonkey

  205. Pingback: Oddsmonkey

  206. Pingback: large funnel

  207. Pingback: somulin

  208. Pingback: envisionsolutionsnow.com/omega-xl-review/

  209. Pingback: consumerhealthdigest.com/menopause-supplement-reviews/menoquil.html

  210. Pingback: zenofem

  211. Pingback: consumerhealthdigest.com/eye-cream-reviews/eyevage.html

  212. Pingback: www.consumerhealthdigest

  213. Pingback: فیلم نهنگ عنبر

  214. Pingback: Jueza Berdion de Crudo

  215. Pingback: Buy illegal backlinks

  216. Pingback: avakin life hack download

  217. Pingback: دانلود فیلم رگ خواب

  218. Pingback: switchable film

  219. Pingback: Hakukoneoptimointi Espoo

  220. Pingback: mobile accessories

  221. Pingback: iTunes

  222. Pingback: sexmag

  223. Pingback: Going Here

  224. Pingback: news aaj tak live

  225. Pingback: 10 Speed Wireless Remote Silky Soft Vibrating Egg BIG Purple

  226. Pingback: http://bbs.baituibao.com/home.php?mod=space&uid=340363&do=profile&from=space

  227. Pingback: https://netplusadmdev0.internet2.edu/user/fds

  228. Pingback: drajmed.pl

  229. Pingback: bulk computer disposal

  230. Pingback: savporn.com

  231. Pingback: Tri-Cities We Fix Cell Phone

  232. Pingback: اغاني عربية

  233. Pingback: cheap essay writing help

  234. Pingback: read review

  235. Pingback: bigg boss 11

  236. Pingback: Yahoo Finance

  237. Pingback: curatare aer conditionat

  238. Pingback: josep maria mainat español

  239. Pingback: KOREL DENTISTRY

  240. Pingback: Daniel

  241. Pingback: porn city

  242. Pingback: Fıstık Ezmesi

  243. Pingback: programa de ventas

  244. Pingback: aparate aer conditionat ieftine

  245. Pingback: porn

  246. Pingback: momschips review

  247. Pingback: bath bimbs

  248. Pingback: buy hacklink

  249. Pingback: cheap snapbacks

  250. Pingback: buy google hacklink

  251. Pingback: google blackhat free

  252. Pingback: coupons

  253. Pingback: michael kors factory outlet

  254. Pingback: Gardening

  255. Pingback: tea shop

  256. Pingback: bici da trial

  257. Pingback: https://my-movies-and-stories.tumblr.com

  258. Pingback: anthony morrison

  259. Pingback: michael kors

  260. Pingback: satin al

  261. Pingback: personal injury lawyer

  262. Pingback: vip financial education

  263. Pingback: anthony morrison

  264. Pingback: door hanger stainless steel

  265. Pingback: porn sites

  266. Pingback: free porn sites

  267. Pingback: best porn

  268. Pingback: spinz.io

  269. Pingback: Pornofilme

  270. Pingback: deeeep.io beta

  271. Pingback: safe porn sites

  272. Pingback: free porn sites

  273. Pingback: Luft til vann vamrepumpe

  274. Pingback: landal poppenberg

  275. Pingback: payday loan

  276. Pingback: btc

  277. Pingback: nike shoes for men

  278. Pingback: get bigger naturally

  279. Pingback: maranathafarm.org

  280. Pingback: best free porn sites

Leave a Reply

Scroll To Top