Barney Frank Up To No Good Still

Judicial Watch Ranked Barney Frank as the 3rd most corrupt politician of 2009:

3.Rep. Barney Frank (D-MA): Judicial Watch is investigating a $12 million TARP cash injection provided to the Boston-based OneUnited Bank at the urging of Massachusetts Rep. Barney Frank. As reported in the January 22, 2009, edition of the Wall Street Journal, the Treasury Department indicated it would only provide funds to healthy banks to jump-start lending. Not only was OneUnited Bank in massive financial turmoil, but it was also "under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use." Rep. Frank admitted he spoke to a "federal regulator," and Treasury granted the funds. (The bank continues to flounder despite Frank's intervention for federal dollars.) Moreover, Judicial Watch uncovered documents in 2009 that showed that members of Congress for years were aware that Fannie Mae and Freddie Mac were playing fast and loose with accounting issues, risk assessment issues and executive
compensation issues, even as liberals led by Rep. Frank continued to block attempts to rein in the two Government Sponsored Enterprises (GSEs). For example, during a hearing on September 10, 2003, before the House Committee on Financial Services considering a Bush administration proposal to further regulate Fannie and Freddie, Rep. Frank stated: "I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two Government Sponsored Enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury." Frank received $42,350 in campaign contributions from Fannie Mae and Freddie Mac between 1989 and 2008. Frank also engaged in a relationship with a Fannie Mae Executive while
serving on the House Banking Committee, which has jurisdiction over Fannie Mae and Freddie Mac.

Posted by austinkay ( Barney Frank Fannie Mae Herb Moses ) :: Permalink :: Trackbacks (0)

The FED's MBS Purchase Program Nearing End Of Funds Allocation

Fed MBS Program Update: 94% of Funding Used

As reported by Mortgage News Daily

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS).

In the week ending February 3, 2010, the Federal Reserve purchased a total of $17.63 billion agency MBS. In those five days the Federal Reserve sold $5.63 billion (supported the roll market) for a net total of $12 billion MBS purchases.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Since the inception of the program in January 2009, the Fed has spent $1.17 trillion in the agency MBS market, or 93.83 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010. This leaves $77.08 billion left to purchase MBS coupons in the TBA market.

Of the net $12.00 billion purchases made in the week ending February 4, 2010:

 

  • $450  million was used to buy 30 year 4.0 MBS coupons. 3.75 percent of total weekly purchases
  • $7.45 billion was used to buy 30 year 4.5 MBS coupons. 62.08 percent of total weekly purchases
  • $2.68 billion was used to buy 30 year 5.0 MBS coupons. 22.29 percent of total weekly purchases
  • $675 million was used to buy  30 year 6.0 MBS coupons. 5.63 percent of total weekly purchases
  • $300 million was used to buy 15 year 4.0 MBS coupons. 2.50 percent of total weekly purchases
  • $300  million was used to buy 15 year 4.5 MBS coupons. 3.75 percent of total weekly purchases

30.6 percent of the mortgage-backs purchased were Fannie Mae MBS, 47.1 percent were Freddie Mac coupons, and 22.3 percent were Ginnie Mae. 94 percent of purchases were 30 year MBS coupons.

The Fed's daily purchase average was $2.40 billion per day, which is unchanged from last week's daily average of $2.40 billion per day. If the Fed were to evenly disperse the remaining $77.08 billion over the next 8 weeks, they would average $1.92 billion purchases per day or $9.64 billion per week.

Given the slowdown in the mortgage market, this should be enough to offset new loan production supply from originators.

Below is a chart illustrating the evolution of the Federal Reserve's Agency MBS Purchase Program. Notice over the past few months the Fed has reduced their purchases and used remaining funds to offset new loan production supply, 4.50 (RED) and 5.00 (GREEN) MBS coupons specifically,  which has helped keep mortgage rates low relative to benchmark Treasury yields. Overall, weekly purchases continue to decline, yet mortgage valuations remain stable.

 

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