What to expect at HousingWire’s Spring Summit

The focus of the Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and this year is expected to be just as incredible.

How real estate agents can increase profitability in 2021

As real estate professionals strategize on how to do business in this competitive, fast-paced market, they’ll discover the need for better tools to market their listings.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.

Mortgage

Fannie Mae and Freddie Mac head for the exit as COVID-19 rages

The GSEs announce they are looking for financial advisors in first step toward ending conservatorship

In the midst of the sharpest economic drop since the Great Depression, prompted by the COVID-19 pandemic, Fannie Mae and Freddie Mac said they are looking for financial advisors to underwrite what is likely to be the largest public share offering in U.S. history.

The timing of the announcement underscores the Trump administration’s determination to end the conservatorship of the world’s two largest mortgage financiers. The GSEs have to move quickly if they want to ensure they exit conservatorship before the November election, which could put a different administration in charge, said Jaret Seiberg, managing director of Cowen Group in Washington D.C.

It’s possible to hire financial advisors and handle the pandemic-induced turbulence in the housing market, said Fannie Mae CEO Hugh Frater. About 8% of U.S. mortgages are now in forbearance after borrowers lost jobs because of COVID-19 shutdowns, according to the Mortgage Bankers Association.

“While we are fulfilling our mission and helping to keep people in their homes during this national emergency, we also remain committed to ensuring a responsible exit from conservatorship,” Frater said.

The financial advisors will assess the company’s valuation, review its business plan, identify options for raising capital and evaluate regulatory considerations during a transition period, Freddie Mac said in a statement.

For the record, putting shares of Fannie Mae and Freddie Mac up for sale wouldn’t be “initial public offerings,” because Fannie Mae began trading on the New York Stock Exchange in 1968, and Freddie Mac began trading on the same exchange in 1989.

The “offering” would be the 80% of Fannie Mae and Freddie Mac preferred stock held by the federal government since 2008. The remaining 20% trades over-the-counter.

The size of the share offering may be as high as $200 billion, which would make it the largest offering in history. It would beat last year’s IPO of Saudi Aramco, the Saudi Arabian government’s petroleum and natural gas company. It raised $25.6 billion on Dec. 5, beating Alibaba’s $25 billion IPO in 2014.

The stocks of both GSEs were priced at about $1.60 in the hour before the GSEs announced at the 4 p.m. close of trading on Monday they were searching for financial advisors.

Shares of the companies once traded above $68 and were considered as safe as U.S. Treasuries because of an implied government backing. They were kicked off the NYSE after they were seized by the government during the 2008 financial crisis and became penny stocks.

In November 2008, you could have bought a share of Fannie Mae for 54 cents.

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