“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “
Bloomberg | May 08, 2017
Such a move could trigger major disruptions for mortgage securities because investors wouldn’t have confidence of the government backstopping the market in a crisis, BlackRock said.
(Bloomberg)—One of the U.S.’s largest mortgage-bond investors says it would be a mistake for the federal government to relinquish control of Fannie Mae and Freddie Mac without first making major changes to the nation’s housing-finance system.
In a white paper released Friday, BlackRock Inc. cautioned against what’s known as recap and release, a proposal pushed by some hedge funds and advocacy groups that calls on the U.S. Treasury to quickly sell its shares in Fannie and Freddie after allowing the companies to build up capital. Such a move could trigger major disruptions for mortgage securities because investors wouldn’t have confidence of the government backstopping the market in a crisis, BlackRock said.
(Bloomberg)—One of the U.S.’s largest mortgage-bond investors says it would be a mistake for the federal government to relinquish control of Fannie Mae and Freddie Mac without first making major changes to the nation’s housing-finance system.
In a white paper released Friday, BlackRock Inc. cautioned against what’s known as recap and release, a proposal pushed by some hedge funds and advocacy groups that calls on the U.S. Treasury to quickly sell its shares in Fannie and Freddie after allowing the companies to build up capital. Such a move could trigger major disruptions for mortgage securities because investors wouldn’t have confidence of the government backstopping the market in a crisis, BlackRock said.
The paper broadly outlines principles BlackRock supports. The world’s largest money manager is the latest party to weigh in on the housing-finance system as Congress prepares for a renewed debate on whether and how to reform Fannie and Freddie, which underpin about half of the mortgage market.
The government took over the companies during the 2008 financial crisis, eventually providing $187.5 billion in bailout money. Fannie and Freddie have since become profitable and paid the Treasury more in dividends than they took, but policy makers have struggled to agree on a permanent solution on what to do with the companies.
In the past year, lenders, think tanks, former policy makers and others have issued proposals to change Fannie and Freddie or release them into the private market. The ideas run the gamut from turning them into shareholder-owned utilities to merging them into a single government-owned corporation. Investment firms that own Fannie and Freddie shares — and are eager to get their hands on the companies’ profits — have been among the most aggressive advocates of letting them preserve capital.
Rather than endorse a specific proposal, BlackRock said it’s agnostic on the structure of the new system, as long as it includes features it believes would protect mortgage investors. The investment firm said mortgage-backed securities should have an explicit government guarantee, and that private capital should stand in front of taxpayers in case of a downturn.
If an overhaul leads to the creation of a new kind of mortgage-backed security, BlackRock wants to make sure they are interchangeable with Fannie and Freddie’s current bonds. That would prevent legacy debt from getting isolated in its own, dying market.
The company also said severely limiting the government’s role in housing, as has been called for by some House Republicans, would harm the housing market.
‘Different Place’
“It’s important to acknowledge that we’re in a very different place than we were in September 2008, both in terms of the state of the housing market and in terms of the financial condition of the GSEs themselves,” said BlackRock managing director Kevin Chavers, citing changes made to the companies by their regulator in the past nine years. “Is there still more to do? Yes, there’s still more to do, but you’re part of the way there.”
BlackRock and its customers have a huge financial stake in the outcome of a Fannie and Freddie overhaul. The firm says it has more than $1.6 trillion under management in fixed-income funds, which include funds that invest in mortgage bonds.
The Senate Banking Committee plans to hold a hearing on housing finance next week. Craig Phillips, a former BlackRock executive, is now a counselor for Treasury Secretary Steven Mnuchin and has met with authors of several overhaul proposals.
John Taylor, president of the National Community Reinvestment Coalition, said he felt the BlackRock paper and other reform proposals have morphed into a debate between different segments of Wall Street rather than about the borrowers the companies were created to serve.
“The original purpose of the GSEs was to help working-class people move up the economic ladder,” said Taylor, who is among those who have advocated for Fannie and Freddie to be recapitalized and released. “There’s nothing in there for working-class Americans and how the market’s going to serve them.”
To contact the reporter on this story: Joe Light in Washington at jlight8@bloomberg.net To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net Gregory Mott, Justin Blum
ARE YOU R
OT” DOWNTOWN PHOENIX APT. MARKET – HOSTED BY AMA & KASTEN LONG COMMERCIAL GROUP. EVENT INFO- MAY 17, 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
List of Economic Development Projects in Pinal County, Revised 2-14-17
- WEEKLY APARTMENT CLOSING UPDATE / THROUGH April 28, 2017 / Phoenix Arizona Metro
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
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Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
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Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
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Timeline of Phoenix, Arizona history
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Facts of Arizona – year 1848 to 2013
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
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