Only the people who don’t need a mortgage will be able to get one. Bundling securities will be micro analyzed segregating our communities preventing social mobility and stalling our economy. Liquidity will be dammed and Trillions will flow into Wall Street as the rich will have control of the industry. Don’t fool yourself. Having Uncle Sam cosign your loan is a good idea, and currently is the popular punching bag for lets face it greed. 10% Interest is ridiculous and preventing F&F from healing and slowing down the US recovery. The Government needs to act like a partner, not a loan shark.
With all the money our goverment has invested in this company to keep it from going under. With the unemployment rate in most states now declining , and with the stock market lingering around the 12,000 mark . It's time to buy this company up. A $1000.00 invested now will have a 600 % return within 18 months. Buy . Buy . Buy .
Freddie & Fannie already entered its rising phase from the lowest trough. Although both mortgage gaints have a -ve Net Equity, their mortgage business covered a large number of metropolitan cities in U.S. Both stocks have a very high value (>US900B) of total assets, an increase in asset value could overcome the problem of neg. net equity once US housing problems improved.
The Treasury Department announced on December 24, 2009 that it was uncapping the credit lines for both Fannie Mae and Freddie Mac for the next three years. This announcement ensures that the U.S. Government will back both mortgage giants for three years, regardless of the size of their losses. In other words, the government has essentially guaranteed the survival of both Fannie Mae and Freddie Mac for the next three years.
At the same time, the top U.S. housing regulator approved executive compensation packages for both the CEO's of Freddie Mac and Fannie Mae. Both CEO's have total compensation packages of up to $6 million, helping both mortgage agencies attract and retain top talent. This is especially helpful for Freddie Mac, who has had trouble finding and keeping a long term CEO.
Investors know that this company is a winner, with their mortgage default rate of less than 1% profits are in its future. Most of the Derivitive nightmare is behind us except for that which AIG has been successfully cleaning up. New lending rules are also in place and future loans are being conducted to a higher standard and with the backing of Uncle Sam.
Some people are fearing inflation vs. fixed mortgages, but the reality is and if we are to learn from the Turkish model, all inflation does is send volumes of money in the stock market. History also shows (1970's)that Interest rates will also climb to compensate for any negative effects.
This stock also took a severe hit causing it to be grossly oversold. Most of that hit came from the practice of naked short selling that led to a panic of overselling on both Freddie and Fannie. My advice is buy it up now and hang on because in about six months you will have more than tripled your money, especially if you got in at under $2.00.
