Transcript(for convenience purposes only – accuracy not guaranteed)
FANNIE MAE WILL SELL PREFERRED STOCK TO RAISE CAPITAL. ELLEN JOINS US WITH THE — ELLEN BRAITMAN JOINS US WITH THE LATEST. >> WE’LL TALK ABOUT FREDDIE MAC IN A MOMENT. BUT FANNIE MAE QUARTERLY DIVIDENDS NOW 35 CENTS A SHARE FROM 50 CENTS. ALSO SELLING $7 BILLION OF PREFERRED STOCK LATER THIS MONTH, MOVES INTENDED TO SHORE THE COMPANY’S CAPITAL AS THE HOUSING CRISIS GETS WORK. THEY’RE SAYING THE HOUSING SLUMP WILL HURT FOURTH-QUARTER EARNINGS. KEEP IN MIND, IT IS THE LARGEST SOURCE OF MONEY FOR HOME LOANS IN THE U.S., ESSENTIALLY BUYING PACKAGES OF LOANS. LAST MONTH IT HAD A CAPITAL CUSHION OF $2.3 BILLION AFTER REPORTING A LOSS, A QUARTERLY LOSS OF $1.4 BILLION. SO WHAT ARE INVESTORS SAYING? ONE WE SPOKE TO, WHO OVERSEAS 22 BILLION, IS SAYING THERE MAY BE MORE LOSSES AHEAD. KEEP IN MIND FOR THE STOCKS, SHARES ALREADY DOWN ABOUT 41% SO FAR THIS YEAR. THE LATEST ACTION WE’RE HEARING FROM FANNIE REALLY FOLLOWING IS SIMILAR MOVED MADE BY RIVAL FREDDIE MAC, SELLING $6 BILLION IN PREFERRED STOCK, HALF OF ITS DIVIDEND. LENDERS, KEEP IN MIND, HAVE LOOKED FOR OUTSIDE SOURCES OF CAPITAL, CITIGROUP ANNOUNCING A CASH INFUSION FROM ABU DHABI AND SELLING $2 BILLION OF PREFERRED STOCK TO BANK OF AMERICA. SO ALL OF THIS CONTINUING THAT THEME OF THE INSTITUTIONS THAT REALLY SEEM TO HAVE BEEN WORST HIT WHEN IT COMES TO THE HOUSING SLUMP LOOKING FOR THAT INFUSION OF NEW CASH. >> THANK YOU. ORANGE COUNTY, CALIFORNIA, FILED THE BIGGEST MUNICIPAL BANKRUPTCY IN 1994. NOW THE TREASURER SAYS 20% OF THE 2.3 BILLION IN EXTENDED FUNDS MAY FACE CREDIT RATING CUTS. ORANGE COUNT HOLDS A TOTAL OF $837 MILLION OF S.I.V. DEBT. HE MAW REMEMBER THEY LOST HALF OF THE
Tags: Fannie Mae, Housing Market, Housing Videos, Mortgage Implosion, Writedowns
