Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions
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The Information Content of Put Warrant Issues
The Information Content of Put Warrant Issues Scott Gibson a Paul Povel b Rajdeep Singh b February 2006 a Department of Economics and Finance, School of Business, College of William and Mary, Williamsburg, VA 23187. b Department of Finance, Carlson School of Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455. Email: [email protected] (Gibson), [email protected] (Povel) and [email protected] (Singh). We are grateful to Sugato Bhattacharyya, Francesca Cornelli, Gustavo Grullon, Dirk Jenter, Jack Kareken, Ross Levine, Bob McDonald, Roni Michaely, Sheridan Titman, Andrew Winton, and seminar participants at the 11th annual Financial Economics and Accounting conference at Ann Arbor, MI, and at University of Minnesota and Cornell University for their helpful comments. The Information Content of Put Warrant Issues Abstract We analyze why ¯rms may want to issue put warrants, i.e., promises to repurchase their own shares at a given price in the future. We describe four alternative explanations, one of which is novel: that put warrants are issued by ¯rms that wish to signal their good future prospects to their investors (who undervalue the ¯rms in the eyes of their managers). We test the validity of the four alternative explanations, using a new, hand-collected data set on put warrant issues in the U.S. between 1993 and 1999. We ¯nd evidence that is inconsistent with three of the four explanations. Only the signaling explanation is consistent with the empirical evidence. Put warrant issuers strongly outperform their peers in the years after the put warrant issues; they enjoy valuable and improving investment opportunities, and they invest heavily. -
Intermediate Elder Law Update
INTERMEDIATE ELDER LAW UPDATE Tuesday, November 1, 2016 New York City Wednesday, November 2, 2016 Westchester Wednesday, November 9, 2016 Buffalo/Amherst Thursday, November 10, 2016 Albany Wednesday, November 16, 2016 Long Island NYSBA Co-Sponsors: Elder Law and Special Needs Section Committee on Continuing Legal Education This program is offered for education purposes. The views and opinions of the faculty expressed during this program are those of the presenters and authors of the materials. Further, the statements made by the faculty during this program do not constitute legal advice. Copyright ©2016 All Rights Reserved New York State Bar Association Lawyer Assistance Program 1.800.255.0569 Q. What is LAP? A. The Lawyer Assistance Program is a program of the New York State Bar Association established to help attorneys, judges, and law students in New York State (NYSBA members and non-members) who are affected by alcoholism, drug abuse, gambling, depression, other mental health issues, or debilitating stress. Q. What services does LAP provide? A. Services are free and include: • Early identification of impairment • Intervention and motivation to seek help • Assessment, evaluation and development of an appropriate treatment plan • Referral to community resources, self-help groups, inpatient treatment, outpatient counseling, and rehabilitation services • Referral to a trained peer assistant – attorneys who have faced their own difficulties and volunteer to assist a struggling colleague by providing support, understanding, guidance, and good listening • Information and consultation for those (family, firm, and judges) concerned about an attorney • Training programs on recognizing, preventing, and dealing with addiction, stress, depression, and other mental health issues Q. -
Ginnie Mae: How Does It Work and What Does It Do?
Economic Policy Program Housing Commission Ginnie Mae: How Does it Work and What Does it Do? The Government National Mortgage What Does Ginnie Mae Do? Association (or Ginnie Mae) is a Ginnie Mae only guarantees securities created by approved government corporation within the issuers and backed by mortgages covered by other federal U.S. Department of Housing and programs. Urban Development (HUD). It was The Ginnie Mae guarantee ensures that investors in these established in 1968 when Fannie mortgage-backed securities (MBS) do not experience any Mae was privatized. Its mission is disruption of the timely payment of principal and interest, thus shielding them from losses resulting from borrower to expand funding for mortgages defaults. As a result, these MBS appeal to a wide range that are insured or guaranteed by of investors and trade at a price similar to that of U.S. other federal agencies. When these government bonds of comparable maturity. However, the guarantee also places Ginnie Mae, and ultimately American mortgages are bundled into securities, taxpayers, at risk of losses not covered by the other federal Ginnie Mae provides a full-faith-and- programs (see When Does a Ginnie Mae Guarantee Apply?). credit guarantee on these securities, thus lessening the risk for investors and broadening the market for the securities. WWW.BIPARTISANPOLICY.ORG When Does a Ginnie Mae Why Does Ginnie Mae Use the Term Guarantee Apply? “Issuer/Servicer?” Ginnie Mae guarantees MBS backed by loans covered Ginnie Mae MBS can include mortgages by the following programs: purchased from multiple originators n The Federal Housing Administration’s single-family and multifamily mortgage insurance programs, which and serviced by third parties. -
Housing and the Financial Crisis
This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Housing and the Financial Crisis Volume Author/Editor: Edward L. Glaeser and Todd Sinai, editors Volume Publisher: University of Chicago Press Volume ISBN: 978-0-226-03058-6 Volume URL: http://www.nber.org/books/glae11-1 Conference Date: November 17-18, 2011 Publication Date: August 2013 Chapter Title: The Future of the Government-Sponsored Enterprises: The Role for Government in the U.S. Mortgage Market Chapter Author(s): Dwight Jaffee, John M. Quigley Chapter URL: http://www.nber.org/chapters/c12625 Chapter pages in book: (p. 361 - 417) 8 The Future of the Government- Sponsored Enterprises The Role for Government in the US Mortgage Market Dwight Jaffee and John M. Quigley 8.1 Introduction The two large government- sponsored housing enterprises (GSEs),1 the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), evolved over three- quarters of a century from a single small government agency, to a large and powerful duopoly, and ultimately to insolvent institutions protected from bankruptcy only by the full faith and credit of the US government. From the beginning of 2008 to the end of 2011, the two GSEs lost capital of $266 billion, requiring draws of $188 billion under the Treasured Preferred Stock Purchase Agreements to remain in operation; see Federal Housing Finance Agency (2011). This downfall of the two GSEs was primarily a question of “when,” not “if,” given that their structure as a public/private Dwight Jaffee is the Willis Booth Professor of Banking, Finance, and Real Estate at the University of California, Berkeley. -
Appraisal and Property Related Faqs
Appraisal and Property-Related Frequently Asked Questions Updated August 2021 This FAQ document provides responses to common questions related to Fannie Mae’s property eligibility and appraisal policies. Table of Contents Resources .............................................................................................................................................................................................. 1 FAQs ....................................................................................................................................................................................................... 1 Property Eligibility ............................................................................................................................................................................. 1 Appraiser Selection and Management ............................................................................................................................................. 2 Appraisal Submission and Forms ..................................................................................................................................................... 3 Appraisal Policy ................................................................................................................................................................................. 4 Resources For additional information about Fannie Mae’s appraisal policies, refer to the Selling Guide. Other resources are available on the Appraisers page on Fannie Mae’s -
THE 2019 STRATEGIC PLAN for the CONSERVATORSHIPS of FANNIE MAE and FREDDIE MAC October 2019
THE 2019 STRATEGIC PLAN FOR THE CONSERVATORSHIPS OF FANNIE MAE AND FREDDIE MAC October 2019 Page Footer Division of Conservatorship THE 2019 STRATEGIC PLAN FOR THE CONSERVATORSHIPS OF FANNIE MAE AND FREDDIE MAC Table of Contents Executive Summary ................................................................................. 1 Introduction ........................................................................................... 6 A History of the Federal Housing Finance Agency and the Conservatorships of Fannie Mae and Freddie Mac .................................. 6 A New Conservatorship Strategic Plan ........................................................ 9 I. Changes to the Market 9 II. Changes to the Regulator 10 III. Changes to the Enterprises 10 Executing the Strategic Plan: A New Scorecard With 3 Key Objectives ............ 11 I. Section 1: Foster a CLEAR National Housing Finance Markets 12 II. Section 2: Operate in a Safe and Sound Manner Appropriate for Conservatorship 13 III. Section 3: Prepare to Exit Conservatorship 15 Conclusion ............................................................................................ 16 i THE 2019 STRATEGIC PLAN FOR THE CONSERVATORSHIPS OF FANNIE MAE AND FREDDIE MAC Executive Summary September 6, 2019, marked 11 years since the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac, respectively, and together the Enterprises) were placed into conservatorships in the middle of the financial crisis of 2008. A root cause of the -
Uniform Collateral Data Portal® (UCDP®) User Guide for Fannie Mae Messaging
Uniform Collateral Data Portal® (UCDP®) User Guide for Fannie Mae Messaging September 2021 © 2021 Fannie Mae September 2021 Page 1 of 24 Table of Contents Introduction .............................................................................................................................................................................................. 3 What is the UCDP User Guide for Fannie Mae Messaging? ............................................................................................................... 3 Who should read this manual? .............................................................................................................................................................. 3 What’s in this manual? .......................................................................................................................................................................... 3 1. View/Edit Pages for Appraisal Submissions .......................................................................................................................... 3 Figure 1.0.1 View/Edit Page with Fannie Mae Tabs .............................................................................................................................. 4 Table 1.0.2 Appraisal Information Subsections .................................................................................................................................... 5 2. Viewing and Editing Appraisal Information ......................................................................................................................... -
Beyond Guardianship: Toward Alternatives That Promote Greater Self-Determination
Beyond Guardianship: Toward Alternatives That Promote Greater Self-Determination National Council on Disability March 22, 2018 National Council on Disability (NCD) 1331 F Street NW, Suite 850 Washington, DC 20004 Beyond Guardianship: Toward Alternatives That Promote Greater Self-Determination National Council on Disability, March 22, 2018 Celebrating 30 years as an independent federal agency This report is also available in alternative formats. Please visit the National Council on Disability (NCD) website (www.ncd.gov) or contact NCD to request an alternative format using the following information: [email protected] Email 202-272-2004 Voice 202-272-2022 Fax The views contained in this report do not necessarily represent those of the Administration, as this and all NCD documents are not subject to the A-19 Executive Branch review process. National Council on Disability An independent federal agency making recommendations to the President and Congress to enhance the quality of life for all Americans with disabilities and their families. Letter of Transmittal March 22, 2018 President Donald J. Trump The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President: The National Council on Disability (NCD) is pleased to submit its report, Beyond Guardianship: Toward Alternatives That Promote Greater Self-Determination for People with Disabilities, which provides a comprehensive review of guardianship against the backdrop of the civil rights advancements of individuals with disabilities in the past several decades. While people with a variety of disabilities may face guardianship, the burgeoning aging population in America has forced issues surrounding guardianship to the fore in national media coverage and policy debates in recent years, making NCD’s report a timely contribution to policy discussions. -
Credit Risk Retention Rules
DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 43 Docket No. OCC-2013-0010 RIN 1557-AD40 FEDERAL RESERVE SYSTEM 12 CFR Part 244 Docket No. R-1411 RIN 7100-AD70 FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 373 RIN 3064-AD74 FEDERAL HOUSING FINANCE AGENCY 12 CFR Part 1234 RIN 2590-AA43 SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 246 Release No. 34-73407; File No. S7-14-11 RIN 3235-AK96 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Part 267 RIN 2501-AD53 Credit Risk Retention AGENCIES: Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); U.S. Securities and Exchange Commission (Commission); Federal Housing Finance Agency (FHFA); and Department of Housing and Urban Development (HUD). ACTION: Final rule. SUMMARY: The OCC, Board, FDIC, Commission, FHFA, and HUD (the agencies) are adopting a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (15. U.S.C. 78o-11), as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act or Dodd-Frank Act). Section 15G generally requires the securitizer of asset- backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages,” as such term is defined by the agencies by rule. -
Asset Swaps and Credit Derivatives
PRODUCT SUMMARY A SSET S WAPS Creating Synthetic Instruments Prepared by The Financial Markets Unit Supervision and Regulation PRODUCT SUMMARY A SSET S WAPS Creating Synthetic Instruments Joseph Cilia Financial Markets Unit August 1996 PRODUCT SUMMARIES Product summaries are produced by the Financial Markets Unit of the Supervision and Regulation Department of the Federal Reserve Bank of Chicago. Product summaries are pub- lished periodically as events warrant and are intended to further examiner understanding of the functions and risks of various financial markets products relevant to the banking industry. While not fully exhaustive of all the issues involved, the summaries provide examiners background infor- mation in a readily accessible form and serve as a foundation for any further research into a par- ticular product or issue. Any opinions expressed are the authors’ alone and do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System. Should the reader have any questions, comments, criticisms, or suggestions for future Product Summary topics, please feel free to call any of the members of the Financial Markets Unit listed below. FINANCIAL MARKETS UNIT Joseph Cilia(312) 322-2368 Adrian D’Silva(312) 322-5904 TABLE OF CONTENTS Asset Swap Fundamentals . .1 Synthetic Instruments . .1 The Role of Arbitrage . .2 Development of the Asset Swap Market . .2 Asset Swaps and Credit Derivatives . .3 Creating an Asset Swap . .3 Asset Swaps Containing Interest Rate Swaps . .4 Asset Swaps Containing Currency Swaps . .5 Adjustment Asset Swaps . .6 Applied Engineering . .6 Structured Notes . .6 Decomposing Structured Notes . .7 Detailing the Asset Swap . -
Collateralized Loan Obligations (Clos) July 2021 ASSET MANAGEMENT | FACT SHEET
® Collateralized Loan Obligations (CLOs) July 2021 ASSET MANAGEMENT | FACT SHEET Conning believes that CLOs are a compelling asset class for insurers in today’s market. As floating-rate securities, they offer income protection in varying market environments while also minimizing duration. At the same time, CLO securities (i.e. tranches) typically offer higher yields than similarly rated corporate bonds and other structured products. The asset class also provides strong capital preservation through structural protections and investor-oriented covenants. Historically, the CLO structure has proven to be extremely resilient through multiple market cycles. In fact there has never been a default in the AAA and AA -rated CLO debt tranches.1 Negative correlation to U.S. Treasury Bonds and low correlations to U.S. investment grade corporate bonds and equities present valuable diversification benefits. CLOs also offer an opportunity to access debt issuers that do not participate in the high-yield bond markets. How CLOs Work Team The CLO collateral manager purchases a portfolio of loans (typically 150-300) Andrew Gordon using the proceeds from the sale of CLO tranches (debt & equity). The interest Octagon, CEO earned from the loan collateral pool is used to pay the coupon to the CLO liabili- 37 years of experience ties. The residual cash flow, after paying the interest on the CLO liabilities and all expenses, is distributed to the holders of the CLO equity. Notably, loan portfolio Gretchen Lam, CFA losses are first absorbed by these equity investors. CLOs are typically rated by Octagon, Senior Portfolio Manager S&P, Moody’s and / or Fitch. -
European and Best Practice Bank Resolution Mechanisms
70152 Public Disclosure Authorized Public Disclosure Authorized EUROPEAN AND BEST PRACTICE BANK RESOLUTION MECHANISMS AN ASSESSMENT AND RECOMMENDATIONS FOR POLICY AND LEGAL REFORMS Public Disclosure Authorized OVERVIEW REPORT Private & Financial Sector Development Department Public Disclosure Authorized Central Europe and the Baltics Country Department Europe and Central Asia Region The World Bank March 30, 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY 3 SECTION I: BACKGROUND 8 SECTION II: BANK RESOLUTION – KEY PRINCIPLES 10 SECTION III: THE FUTURE EU RESOLUTION FRAMEWORK 13 Intervention Triggers 15 Resolution Tools 16 Resolution Powers 18 Funding of Resolution 18 The Cross-Border Dimension 19 RECOMMENDATIONS REGARDING THE EC PROPOSALS 20 SECTION IV: FINANCIAL MECHANISMS AND INSTRUMENTS FOR RESOLUTION 27 Mechanisms and Instruments for Implementing the Resolution Process 27 Categorization and Ranking of Bank Liabilities by Creditor 29 SECTION V: ANALYSIS OF SELECTED COUNTRIES’ RESOLUTION REGIMES 33 POLAND 33 CZECH REPUBLIC 38 GERMANY 42 SPAIN 45 UNITED KINGDOM 52 CROATIA 57 CANADA 61 UNITED STATES 66 SECTION VI: OBSERVATIONS BASED ON REVIEWS OF EU COUNTRIES’ LAWS 68 Importance of the Resolution Regime 68 Observations on Country Frameworks 71 Key Legal Provisions for Credit Institution Resolution 73 Criteria for Supervisory Intervention 73 The Objective of a Proceeding 74 The Governmental Authority Responsible for a Proceeding 75 The Powers of the Administrator of a Resolution Proceeding 75 The Mechanisms that could be used to Resolve an Institution 76 The Effect on Corporate Governance of the Affected Institution 77 CONCLUSIONS 79 This report on European Bank Resolution Mechanisms and proposals for reform, was jointly written by a team comprising John Pollner (Lead Financial Officer, ECSPF, World Bank), Henry N.