FHFAs Conservatorship of GSEs Has No Clear End Ratings Company Says

first_imgFHFA’s Conservatorship of GSEs Has No Clear End, Ratings Company Says Fitch Ratings affirmed that while Fannie Mae and Freddie Mac maintained a “Stable Rating Outlook” in April due to direct financial support from the U.S. government, the ratings company said it expected the controversial FHFA’s conservatorship of the two Enterprises would continue indefinitely.”Despite significant legislative efforts over reform of the housing market during the past year, the government-sponsored enterprises (GSEs) remain in conservatorship without a clear exit path,” Fitch said in its report. “The Federal Housing Finance Agency (FHFA) has signaled that it will not interfere with Congress with respect to housing market reform.”The GSEs have been under FHFA conservatorship since September 2008, at which time they needed a combined bailout of $187.5 billion from taxpayers in order to stay afloat.A recent stress test administered by the FHFA determined that the two GSEs would need another taxpayer bailout, this time of up to $157 billion, when certain hypothetical adverse economic conditions were applied.The Fitch report examined the likelihood of the GSEs having to take another draw on Treasury, which is been an oft-discussed topic among housing market analysts in the last few months. Fannie Mae and Freddie Mac returned to profitability in 2012, but those profits declined substantially from 2013 to 2014. Recent reports, including one from the FHFA Inspector General, have warned that the conservatorship will likely continue, but the profitability of Fannie Mae and Freddie Mac might not.Since 2012, all GSE profits have been swept into Treasury. The GSEs each have a capital buffer of $1.8 billion, but it is required to be reduced by $600 million per year until it reaches zero by 2018. The Enterprises would require another draw on Treasury should their losses exceed their capital buffer.”Fitch believes the likelihood of additional draws from the U.S. Treasury will increase over time as the GSEs’ own capital reserve buffers are reduced to zero by 2018, particularly if economic conditions worsen materially or interest rates change rapidly,” Fitch wrote in the report. Conservatorship Fannie Mae FHFA Fitch Ratings Freddie Mac 2015-05-04 Seth Welborn May 4, 2015 629 Views center_img in Daily Dose, Government, Headlines, News Sharelast_img read more

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first_img Comments   Share   “He chased the money,” Dockett said about Dansby last April. “I’ve got a lot of respect for our guy that left, I love him like a brother. But we were one or two pieces away from really making a lot of noise.“I personally feel like he chased the money versus chasing a ring. No knock towards Cleveland — I don’t want people to try to think I’m saying Cleveland doesn’t have a chance; everybody has a chance — but I just felt like it was made for him to be here.”Fast forward a year. The Cardinals wanted to keep Dockett and have him retire in Arizona. But they were unwilling (wisely so) to acquiesce to the financial demands of a player who will be 34 on opening day and is coming off a serious knee injury. They tried to renegotiate a lesser deal, couldn’t do it and the team released him last week. Dockett got more money from the 49ers.End of story.For most of 2014, the Cardinals proved that they could survive without Dockett. Sure, it would have been nice to have #90 on the defensive line, but a patchwork defensive front seven ranked at or near the top of the league’s rankings against the run for most of the season. Derrick Hall satisfied with D-backs’ buying and selling Top Stories It’s very rare in today’s NFL that a star player begins and ends his career with one team.Yet, the news that Darnell Dockett, who had spent his entire career with the Arizona Cardinals, signed a two-year deal with the rival San Francisco 49ers still hurts a little bit.Dockett, after all, was quoted as saying “I hate that team,” in reference to his new home as recently as 2012. The outspoken veteran also admonished former teammate Karlos Dansby just one year ago for leaving the Cardinals for the Cleveland Browns in free agency. Arizona wanted to keep Dansby, but couldn’t compete with the four-year, $20 million deal the Browns doled out with $12 million guaranteed. Former Cardinals kicker Phil Dawson retires The three-time Pro Bowler reportedly gave the Cardinals an opportunity to match San Francisco’s offer and they didn’t flinch. I have absolutely no problem with Dockett leaving for San Francisco. But that cologne he’s wearing today may as well be called “Hypocrisy by Calvin Klein.” How do you lob verbal jabs at a teammate for doing exactly what you would do 11 months later?In terms of Dockett’s production, it has slipped. He’s had 9.5 sacks in his last 47 games. Kudos to the Cardinals for not allowing emotion and loyalty get in the way and bringing back a player with two huge question marks next to his name at a price that didn’t work for them. Arizona now saves $6.8 million against next year’s $143 million salary cap, which gives them an opportunity to pursue a younger, healthier and more productive player in Dockett’s position next season.It’s been fun watching Darnell Dockett in Cardinal red for the last 11 years, but it’s time to move on. The 5: Takeaways from the Coyotes’ introduction of Alex Meruelo Grace expects Greinke trade to have emotional impactlast_img read more