Stock in Fannie Mae Rising
SOURCE: The New York Times
Even with Fannie Mae's recent announcement of quarterly losses investors are still optimistic about the company. The optimism felt is based on the belief that Fannie Mae will be able to pick and choose from the safest loans available in the marketplace. In fact they have also announced that they will raise an additional $6 billion to purchase additional loans.
"As the market recovers, we will be a prime beneficiary," Fannie Mae's president, Daniel C. Mudd, said in a conference call with analysts Tuesday morning. When the housing market finally stabilizes, the company will "feast" on the mortgages it is currently buying, he added. It is partly due to this belief that the stock price for Fannie Mae has increased by 9% up to a close of $30.81.
The Office of Federal Housing Enterprise Oversight also bolstered these sentiments by announcing that Fannie Mae had been released from growth limits that had been put in place in 2006. The capital reserves that Fannie Mae must hold have also been reduced which will allow it to invest more aggressively without having as large a cash cushion.
Both Fannie Mae and Freddie Mac are essential in today's housing marketplace. They buy more than 80% of all home loans made by banks and other lenders. This helps to provide financing for more home mortgages.
Read full report »
Even with Fannie Mae's recent announcement of quarterly losses investors are still optimistic about the company. The optimism felt is based on the belief that Fannie Mae will be able to pick and choose from the safest loans available in the marketplace. In fact they have also announced that they will raise an additional $6 billion to purchase additional loans.
"As the market recovers, we will be a prime beneficiary," Fannie Mae's president, Daniel C. Mudd, said in a conference call with analysts Tuesday morning. When the housing market finally stabilizes, the company will "feast" on the mortgages it is currently buying, he added. It is partly due to this belief that the stock price for Fannie Mae has increased by 9% up to a close of $30.81.
The Office of Federal Housing Enterprise Oversight also bolstered these sentiments by announcing that Fannie Mae had been released from growth limits that had been put in place in 2006. The capital reserves that Fannie Mae must hold have also been reduced which will allow it to invest more aggressively without having as large a cash cushion.
Both Fannie Mae and Freddie Mac are essential in today's housing marketplace. They buy more than 80% of all home loans made by banks and other lenders. This helps to provide financing for more home mortgages.
Read full report »
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