Wear a mask, protect yourself and others, don't become a grim statistic

One Man’s GSE Opinions and more

With all due respect to actor Matt Damon and his performance in the movie “Good Will Hunting,” how do you like them SCOTUS apples, Director Calabria?

Your seat has to be a little warmer since the High Court ruled this week you can be dumped by the President (any President).

However, I would advise it’s too soon to burnish resume and pack your bags, but you might want to accelerate your GSE RBC/Conservatorship considerations and bend toward those who’ve told you your original language is too extreme and will drive up mortgage costs for those who most need Fannie and Freddie support.

Or, you can ignore the political/business realities, try and promulgate your bad reg, and go down Kamikaze-like appealing to your financial friends on the Right for your next job.

There are acceptable GSE options for you but will you have the leadership skill/instinct to find them?

You might still be able to salvage something from this exercise, if you employ your outside advisors—as well as listen, carefully, to the investment banks which Fannie and Freddie each hired.

Corona-19 Virus and Putin

[For all of those who have chastised me over my occasional comments about President Trump’s performance and record, I wanted to share one more DJT quote for you from Jan. 6, 2020--just six months ago--to show you how reality-removed he’s been from what’s happening to America.]

The POTUS to CNBC: “We have it (The Corona Virus) totally under control. It’s one person coming in from China, and we have it under control. It’s — going to be just fine.”

A hundred twenty five thousand American deaths and growing numbers later—with the prospect of that figure doubling—we know, if the POTUS doesn’t, it hasn’t been fine, since he ignored COVID-19 facts except to cherry-pick items and justify his anti-science, anti-intellectual, egotistical actions.

He defaulted to individual Governors for any kind of public health relief. Unfortunately, a number of them (in Red states) followed their leader and now are paying the price, or at least their citizens are.

When you readers vote in November, remember, the dead and sick, the millions of unemployed, and the wreck our economy has become under Donald Trump.

And don’t get me started about DJT’s “good friend” Vlad Putin.

Say all you want about Joe Biden, but he has more integrity in one hand than DJT has in his entire body.

Any US serviceman or woman—plus their friends and families--should be ashamed to support the guy who refuses to challenge Russia over reports of the Kremlin paying the Taliban to murder American and British GI’s in Afghanistan.

Judge Margaret Sweeney

She’s still important, but not many people know when she was a little girl, Judge Margaret Sweeney was frightened by a calendar and its many different numbered days. This condition also is known as “numerophobia” or fear of numbers (often called “arithmophobia”).

Anxiety meds and therapy often are used by sufferers to get over the condition.

Because of that childhood fear, today Judge Sweeney chooses to kill off more legal and judicial deadline dates than her peers, all the while damning the government for the lies it told and slow walking “discovery” in her GSE case.

Now—a new court decision she blessed this week—puts us into March of 2021 for the next meeting—or even later—(expect invariably this time frame will get scrubbed and rescheduled, too, a legal can too often kicked down the road).

Maloni, 7-2-2020

Happy July 4 to you all; stay safe.

GSE Cats and Dogs

Who is the nation’s most beloved woman and why?

Ruth Bader Ginsburg, Michelle Obama, Laura Bush, Barbra Streisand, Betsy DeVos, Oprah, Hillary Clinton???

Any one of them could lead many such lists, but now with the full disclosure about his unnecessarily complex, heavily ideological proposed risk-based capital, the FHFA’s Mark Calabria has catapulted 65-year-old federal claims court--Judge Margaret Sweeney--to the top spot because she seems to be the only federal judge whose decisions say anything positive about Fannie and Freddie, the US rule of law, and the prospects of GSE plaintiffs securing some relief from the government’s heavy-handed pillage of GSE profits and market operations via the 2013 “sweep.”

GSE fans have been sending her all sorts of gifts to insure she enjoys a long, vigorous, and happy life: vitamins, personalized COVID-19 masks, pelotons, health foods, chickens, sleep adjusted mattresses, names of age-appropriate trainers, meal suggestions, strength techniques, etc. It’s rumored that RBG’s trainer even chatted up Sweeney on correct barbell usage.

You get the picture. Judge Sweeney represents an element necessary to all heavy underdogs….hope! 

RBC

Speaking of Mark Calabria and his latest risk-based-capital proposal—for those still struggling to grasp it--what’s not to understand?

It’s a highly ideological capital construct designed to make the GSEs less effective while, simultaneously, leveraging the ability of the nation’s largest banks to compete in the mortgage world.

No matter how much MC and his staff dodge and run, they can’t escape its inherent higher costs which will impact mortgagors and knock some of them—likely the lower-income segment—from being able to afford a mortgage.

No matter their history, the FHFA posse doesn’t consider Fannie and Freddie real businesses which in the past returned dividends and growth to rapturous investors

There is Calabria’s other hidden problem with hamstringing Fannie and Freddie. He needs them in the future “as real businesses” so they can attract billions of dollars from new investors who would like to see their GSE stock purchases earn money, which is what most investors seek.

FHFA’s and Calabria’s actions to date seem more destructive than constructive which is why GSE fans are rooting for Judge Sweeney’s health and willingness to continue her exposure of government lying and perfidy against Fannie and Freddie in hopes, some court gets that message.

The SCOTUS ended its current session without acting on the “Selia” case, which could have decided the constitutionality of the FHFA, mooting some of its actions.

So, more delay.

And now Mark Calabria gets to oversee another deferral tactic a “GSE-driven Wall Street MMA battle,” with today’s announcement that Fannie (Morgan Stanley) and Freddie (J.P. Morgan-Chase) have chosen their own Wall Street investment banking warriors to rumble in an eight-sided octagon office FHFA has built for the negotiations.

All of this pisses away more GSE money on “outside consultants” and chews up more of the clock to help decide the ground rules for any GSE departure from Conservatorship.

Why does FHFA have 600 or so employees, but every time they do anything important, the agency requires outside consulting help or is that just a Calabria MO?

In his “2019 Report to Congress,” sent this week to the Hill, Calabria seeks even more power to destabilize the secondary mortgage market by seeking statutory authority to create competitive guarantors. (Maybe he’ll use his 600 do-nothings to work on that task??)

Maybe it’s the slowly drying up optimist in me, but I believe when all the dust settles, much of the Calabria plan will fall by the wayside because of its negative financial impact on the families Congress wants/expects to benefit the most from GE operations.

Now we all get to watch just how?

Maloni, 6-16-2020

George Floyd, Donald Trump, and Mark Calabria

My GSE thoughts will follow, but first, a discordant presidential note

For those who care, last Friday was not a good day for George Floyd, no matter what the POTUS claimed.

Floyd still was dead; his family reeling from his ghastly killing; protests over his death raging in major US cities; more than 110,000 of his fellow Americans dead in five months--not from police brutality like Floyd--but COVID-19, a virus which continued to infect and take lives; unemployment still hit 13.8% (meaning millions of his fellow citizens still were without but sought jobs); our President continued his lying and campaigning for office failing to offer any succor to US demonstrators, but trying to suggest he was responsible for fewer unemployed. 

In violation of the Constitution, DJT wanted US troops to patrol US cities. (Someone sounds politically rattled and desperate.)

Hiding and Ignoring Facts, FHFA Produces a Predictable “Snooze-in-ar” 

Two days earlier, one of President Trump’s more recent appointees, Mark Calabria who heads the Federal Housing Finance Agency,  presided over a farce agency “webinar” about the new risk-based capital regulation pre-sold as open and transparent but with no revealing information or answers to the question about how the agency put forward this controversial regulatory order which seems to diverge from history and conflict other promises Calabria made—when he was nominated-- about returning the GSEs to health and private ownership, once they raise additional capital.

After waiting nearly a year, spending millions on outside consultants, FHFA’s Director all but crapped his pants and unloaded a wholly made up new capital design consistent with very little except his goal to injure the GSEs vis-à-vis commercial banks.

Check the facts not just his rhetoric.

He did so with a draft  to set fresh capital standards for Fannie and Freddie as they return to some semblance of their pre-2008 status quo, instead. But he did so with ill regard for low, moderate, and middle income people who the two serve and who most in Congress would choose to support, since it is those would-be mortgagors who will pay for Calabria’s capital enhancement or “buffers,” as he calls them.

Some smart staffer must have suggested that FHFA hold a public “webinar, presumably to field questions about all the bizarre twists and turns, MC’s draft regulation took. But none were explained or simplified. Few listeners were enlightened.

After FHFA blah, blah, blahed about transparency, the agency must have handed out “No Doze” pills to its audience, after pre-approving all questions, so FHFA execs and Director Mark Calabria would not be surprised by questions/questioners for which they had not prepared or had no answers. FHFA then presumably achieved “webinar” Valhalla, when boredom caused most listeners to hang up and check out.

One could almost hear the wafting soon-taken-back salute, “Way to go Brownie," or Markie.

I’m told insomniacs have made requests for the FHFA event tape to help with their sleeping difficulties.

From Calabria’s perspective, that result was a lot better than having to stand up and answer why he contends the GSEs and behemoth banks are close enough from a risk comparison to capitalize each other similarly, even though they have dramatically different charters and do not compete with one another in their standard business lines. Fannie and Freddie are monoline companies and only can guarantee mortgage credit on US homes, while the leviathan commercial banks can operate all over the world offering a variety of complex commercial products (loans). The GSEs do single and multifamily mortgage credit, domestically and--unlike the big banks-- have generated more than 10 years’ worth of superb very low credit losses. 

People who understand the FHFA scheme will see the possibility that Calabria’s rule could end up costing low-moderate-and middle income families as much as a 150 basis points (one and a half percent) more than families with higher credit scores.

Is that what congressional Democrats want??

Challenge this point Senate Banking Committee; don’t buy a pig in a poke because Calabria once was a glib GOP committee staffer and labored for VP Pence. 

If you bless his RBC proposal, you wear it.

Maybe the SBC Senators listening to Calabria on Tuesday will cut through the FHFA’s previous bull crap and ask the Director point blank questions about MC’s ideological  GSE/large bank risk and capital comparisons, as well as who in the mortgage chain will bear the real cost of a GSE capital increase? 

Remember Senators, we are talking about 40% to 50% of all future American mortgages? Do the math for your own states and the negative impact on your constituents in this election year. 
Then take another look in the streets.

Maloni, 6-7-2020

Joe Light earns an infrequent Maloni “Yay”

 Protestors should visit Mark Calabria at FHFA 

FHFA’s recent RBC re-proposal reg (compared to its original one) shouldn’t confuse anyone, it’s not rocket science and it is exactly what it looks like. 

A series of complex capital proposals—when applied in concert— designed to blow up or disable the main Fannie and Freddie battle tanks and to the advantage of the large commercial banks, which still envy GSE mortgage market control and revenue. 

Calabria’s ill-fitting scheme to give Fannie and Freddie “bank like” capital requirements, has gone way beyond that and produced something way beyond “bank like”—since there are no existing conflicting analogies in bank law or regulation designed to deny a regulated institution market generated revenue to establish the capital to escape “Conservatorship,” which is what this long-delayed exercise is all about.

Based on specious reasoning, it allows FHFA’s too ideological director to point to something which embodies the idea, “With the GSEs, you never can have enough capital.” 

Instead what we have is Calabria’s “wet dream” of how he would solve all of the lingering big bank problems with active Fannie and Freddie market competition. He would starve the GSEs then give Fannie and Freddie no chance to escape continued FHFA control—not to return to privately owned, market-sensitive financial institutions (which ironically is the charge in his other GSE responsibilities). 

Light to the Rescue??? 

But the bloom may have left that planned rose—to Calabria’s regret—when this week, Bloomberg’s Joe Light wrote a most useful article saying what FHFA foes have been saying the new proposal will hurt those who most need GSE financing, i.e. less wealthy families many of whom are black and brown. Then, look at what we are seeing and hearing in America’s streets.

In terms of added pressure (political) on FHFA and Calabria, Light’s article and its headline--in a major business publication--will get the attention of stakeholders—and maybe a few Senators and Congressmen-- more than what the few GSE allies have said.

https://www.bloomberg.com/news/articles/2020-06-01/fannie-freddie-capital-rule-seen-harming-less-wealthy-borrowers  

 (See headline and segment below.)

Fannie-Freddie Capital Rule Seen Harming Less-Wealthy Borrowers
By Joe Light

June 1, 2020, 6:00 AM EDT 

“A top regulator’s plan for boosting Fannie Mae and Freddie Mac’s ability to withstand losses could mean higher costs for many mortgage borrowers, with the burden falling most heavily on those with less wealth and lower incomes, according to economists and housing-finance experts.

The 424-page rule released for comment by the Federal Housing Finance Agency last month would dramatically raise the amount of capital the two mortgage-finance giants must hold and likely increase fees they charge for guaranteeing loans, which would hit borrowers in the form of higher interest rates.

FHFA Director Mark Calabria’s proposal highlights the fine line his independent agency and the U.S. Treasury Department must walk to achieve their stated goal of freeing Fannie and Freddie from the government’s grip. To claim success, they will likely have to pull off a juggling act of keeping down borrowers’ costs, protecting taxpayers, appeasing mortgage-bond holders and enticing stock investors needed to re-capitalize the companies.

Mortgage rates would have to rise between 0.15 and 0.2 percentage point on average to meet Calabria’s proposed capital requirements, all else being equal, according to Bob Ryan, who was a senior FHFA adviser until mid-2019 and now consults for firms in the mortgage industry.

The higher interest rates could weigh most heavily on borrowers with lower credit scores and smaller down payments, said Moody’s Analytics chief economist Mark Zandi. In a stressed economic environment, those borrowers might see rates as much as half a percentage point higher than they otherwise would, Zandi said. That would mean, for example, that someone with a $200,000, a 30-year mortgage would pay an additional $58 a month if their interest rate was 4.5% rather than 4%.

“It’s confusing to me,” Zandi said of the proposed rule. “I’m not really sure who benefits from this. I’m not even sure it helps their goal of privatizing” Fannie and Freddie.

If either capital requirements or return demands increase, fees also rise.

Maloni, 6-3-2020

FHFA Leopards don’t change their spots

Are you satisfied, yet, GSE fans and friends?

Has Mark Calabria showed enough true colors?

Some of us have been telling you for the better part of a year that leopards don‘t change their spots and that FHFA Director Mark Calabria never has been a GSE fan, just the opposite. But more should have listened when he discussed his anti-Fannie and Freddie biases and his pro-bank tendencies.

It appears the Senate Banking Committee Republicans—with Calabria, one of their very own former staffers--installed another fox to keep track over the GSE hen house.

If Calabria was more adept, he would have hidden and delayed his political cravings, but his latest risk-based capital proposal “jumped the shark” and unmasked him for what he is and what he wants, i.e. banks in mortgage lending ascendancy (no matter what it costs the public) and the GSEs mortgage execution made too costly and in retreat, thanks to his agency.

It makes clear why in his year on the job, he never has lauded the GSEs for their mission success, low-risk operations, and revenue generation, nor congratulated them for anything else.

Knowing where he was headed he never joined the many who pointed out what valuable federal policy tools the GSE have been in assisting a COVID-19 threatened nation--and its current 100,000 medical deaths (many with DJT’s political DNA all over them)—battle the worst COVID virus housing finance manifestations.

Instead, he's pranced by himself usurping various GSE management techniques--which Fannie and Freddie in the past automatically and logically deployed when tough economic times arose--implying they were his own.

He’s become a full-time poser, pretending he has concern for housing and homeownership, while remaining quite backward-looking and very ideological.

My great joy and satisfaction will be when Calabria understands—following broad public realization, much like Lockhart, DeMarco, Bright, Parrott, Stegman, and other renowned “fellow travelers” did--that his discordant personal agenda has peter-principled.

It could be investment bankers schooling him or GOP pols alerting him to his political stupidity, i.e. signing up President Trump, who is in a major political year election shit storm, to ruin needed GSE efficiency and productivity to enhance the big banks. It is not “an achievement" the President wants, with all of the other political negatives he's hoisting.

“Yay the GOP, you made the mortgage market more bank-reliant and killed competing GSE middle and low income and affordable mortgage finance.”
That's a great TRUMP TV ad (or one from Biden)!.

I believe for one reason or another, Calabria will back off and retreat, eating crow all the way, when the Wall Street investment bankers, along with those he’s wasted GSE revenue hiring for FHFA and those separate bankers, hired by each of the GSEs, explain in small words to him why his capital numbers are vacant.
Exposing his various GSE capital bucket tricks won’t succeed, as he  struggles to keep Fannie and Freddie subservient and under his thumb.

Unless he changes those RBC numbers and his pledge to end “Conservatorship,” both will fail.

But Mr. Director, think. What are you offering those financial stakeholders for their upwards of $200 Billion down the road in the GSE investments you need?????
And where in the bank regulatory or capital statutes are all of your analogies to the GSE RBC proposal???

In several weeks or a few months, after he’s figuratively thrown up all over himself (and the public realizes it), Calabria will walk away from the FHFA to his future big bank job offer-- tail between his legs—another victim to the overwhelming truth about the immense value, efficiency, and support for Fannie Mae and Freddie Mac, because all the ersatz substitute-GSE models fail in systemic comparison.

That’s my desired expectation, despite most in Washington not knowing this fight is going on and why they should respond to the FHFA. But they will when their constituents start writing and calling them about and what the GSEs do or how they do it.

(For a far more substantive review of Calabria’s RBC proposal, read Tim Howard’s latest blog, below.0
 (https://howardonmortgagefinance.com/

Maloni, 5-27-2020

Situational Ethics: The GSE enemy of my enemy is an ally

David Stevens: “MC is the absolute worst person for this job at this time.” 

Continuing with my recent theme, i.e. critiquing Federal Housing Finance Agency (FHFA) Director Mark Calabria’s job performance, I offer the tedious (government prose)--but still indicting--and the rhetorically predictable but fun to ponder. 

Limiting my blog content to just four links, two about Calabria and FHFA and two about our President, I'll let other carry the ball. 

The first is a recent report by the FHFA’s Office of Inspector General (the agency’s internal watchdog), which makes public its findings, largely about the FHFA weaknesses (many) and strengths (not so many).

https://www.fhfaoig.gov/sites/default/files/OIG-2020-002.pdf

The presumption is that Calabria, as head of the agency, is in a position to address these FHFA shortcomings.
But that's hard grunt work, not the stuff of trade association meetings and press releases, which may be why he's is not engaging in cleaning up the cited FHFA foibles.

As a model, President Trump repeatedly ignores Inspectors General  (“IG”) findings and the IG's themselves, since their work comes from knowledgeable insiders which invariably embarrasses their agency superiors.

IG reports often are a butt pain for those in charge who resent/dislike the findings.

The POTUS just orders IG’s dismissed and/or their work otherwise trashed and buried, so Calabria has a model. 

David Stevens gets credit for birthing today's blog title, after his interview with Housing Wire.

https://www.housingwire.com/articles/david-stevens-calabria-may-be-the-absolute-worst-person-for-this-job-at-this-time/ 

(I'll list Stevens as "neutral"--;-)--when it comes to him rating the FHFA Director.)  

Trump observations from others

Rather than personally flail at the POTUS, listen/read two articulate media personages' take on DJT’s scary behavior.

CNN’s Brian Stelter

https://www.cnn.com/videos/media/2020/04/26/life-during-coronavirus-brian-stelter-rs-vpx.cnn

Joe Scarborough, former GOP Congressman and host of “Morning Joe”

https://www.washingtonpost.com/opinions/the-cost-of-trumps-deadly-state-of-denial/2020/04/25/d0488c5c-8591-11ea-878a-86477a724bdb_story.html

Maloni, 4-28-2020

Thanks for joining my anti-Calabria campaign, folks

The Calabria Story, clomp dragging the night away

My focus on Calabria’s antics draws some surprise allies (see headline above)

Following my funeral services, when the bagpipe music fades away, along with the strains of Israel Kamakawiwoʻole--all nearly 1000 pounds of him-- plaintively singing “Over the Rainbow,” and the tears settle on my gravesite, I hope some soul notes I was an early--perhaps the earliest-- Mark Calabria critic.

While initially, I hoped for the best when his nomination first came up, I feared for the worst regarding his stewardship of the Federal Housing Finance Agency (FHFA), which his doctrinaire, ungenerous and petty treatment of Fannie Mae and Freddie Mac now has displayed.

Minus the bagpipes and "Iz," I see I now have been joined in my anti-Calabria campaign by the Mortgage Bankers Association, other major housing trade groups, David Stevens, Chris Whalen, “Navy Commander,” and many other GSE stalwarts who post Fannie and Freddie comments on Investor Hub.

Welcome aboard, you all.

Most responsible federal regulators would be looking at ways for their regulated institutions to help solve systemic problems in their industry industries, generated by issues related to fighting COVID-19.

In this particular instance, the threat is from possible cascading repercussions from so many mortgagors taking up the government's offer to withhold their monthly mortgage payments under current federal rules (for as long as a year).

But, watching from the sidelines, Director Calabria has clomp, dragged and announced what he won’t let Fannie and Freddie be a limited source of servicer liquidity.

He's hardly a Profile in Courage.

(Someone better wise up the boy that anyone with deep credit, i.e. the Fed, Treasury, or the GSEs can play that liquidity role. The GSEs might have more expertise because they work with servicer partners in more traditional non-threatening times.)

When asked, specifically about helping out servicers, Calabria clomp, dragged this policy option, as reported in “Housing Wire.”

“So, the yes is we have contingency plans and procedures put in place were this distress to happen (servicers failing),” Calabria continued. “So that’s the yes part. The no part is, do we have a liquidity facility that we will be providing via Fannie and Freddie? The answer’s no. We don’t have the resources at Fannie and Freddie to do that.”

When I hear Calabria address the servicer dilemma, I keep hearing a version of President Trump--desperate to be elected no matter the cost-- first denying the US has a COVID-19 problem,  and then assuring all will be well once the weather warms up.

“We’re at war,” the POTUS pretends

So why isn’t President Trump continuously employing the federal Defense Production Act—which only he can activate--to require US companies to produce everything needed to fight the “VID” including swabs, more N95 masks, PPE, testing kits and testing materials/drugs, and filling other equipment and food needs, as domestic supply systems breakdown around him? 
Or, has he sought a bone spur deferment once again? 

In his self-serving daily briefings, barely disguised, totally transparent, election campaigning, the POTUS appears quite tired. The white circles under his eyes have white circles. Trying to avoid his responsibilities, he’s thrashing about changing his position, regularly,  and looking for scapegoats.

Despite months of recorded and video examples of his misleading and downplaying his Administration’s delayed, lame, blame-filled response (blame Obama, the Chinese, the states, Democrats), but he doesn’t point at anybody in his orbit for bad decisions, going AWOL for February, and poor preparation for the COVID-19 novel coronavirus, which has gobsmacked our nation.

Despite the ample video and audio proof showing him floundering and lying, The President keeps denying he made those statements and gaffs (although the polls seemed to be catching up with his lies).

He also claimed that all testing matters—of which today they are many--need to be addressed by the states and not the federal government; he alleged he had the constitutional authority to close down or open any state at his own whim; he also claimed that he along could force Congress to meet or not meet.

Last week, he quickly backed off both of those fatuous mistakes, within 24 hours after making them.

I realize that no matter what he now says (no matter how wrong or outrageous), 40% or more of the nation will believe and follow him, which is so sad. 

Future Trump moves I expect, so get ready

--blaming Governors for those communities where COVID-19 infections and deaths increase, after Trump browbeat them into “opening” before sufficient tests have been done to verify local safety.

--Look for excuses to ban mail-in voting and discourage it wherever it crops up, lying as he has about “voter fraud,” which has been all but non-existent anywhere, save in Trump’s mind and on FOX news.

--If Voters should reject him in November, he will tie up the final result in the Supreme Court.

--Just as the nation should prepare for the coming Trump/GOP voter suppression plays, we need to prepare his reluctance to give up his four year holiday at 1600 Pennsylvania Avenue.

Maloni, 4-19-2020

 (Thanks, Al.)