Desire costs at 50-yr lows are creating document need for regular home loans insured by Fannie Mae (FNMA) and Freddie Mac (FMCC). Delinquencies are also climbing with Covid-19, but continue being workable provided conservative underwriting pre-tax, pre-reserve earnings and reinsurance. To assure safety and soundness, The Federal Housing Finance Company (FHFA) is pursuing Congress’ route in the Housing and Economic Restoration Act to recapitalize and launch Fannie and Freddie from conservatorships. Lawful advisers and investment bankers are performing toward their reprivatizations. Taxpayers have been compensated in comprehensive and received 80% ownership in every firm for Governing administration financial loans. The “Net Really worth Sweep” 3rd modification to the U.S. Treasury’s Favored Stock Acquire Settlement should really be terminated as swiftly as it was executed with FHFA. If not, the U.S. Supreme Courtroom will hear the issue in December or January.
From Bruce Berkowitz (Trades, Portfolio)’s Fairholme Fund (Trades, Portfolio) 2020 semiannual shareholder letter.
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