FM Watch complained that last weekend's update item concerning Fannie Mae and lobbying costs was a bit too favorable to the secondary giant. FM Watch spokesman, Beneva Schulte, pointed out that Fannie's lobbying costs for 2001 ($6.57 million) excluded what the Congressionally-chartered mortgage investor is paying its inhouse lobbying staff. According to Senate records, Fannie employs nine inhouse lobbyists: Arne Christenson, Duane Duncan, Nate Gatten, John Hines, Carmen Lowrey, Robert Maloney, William Maloni , Rich Maurano, and Laura Van Etten. We have no idea what each one of these individuals earns, but $125,000 a year (on average) seems like a good guess. That would add another $1.125 million to Fannie's lobbying costs. Of course, we don't know what executive director Mike House and his crew are making either...
Processing Content
While we're on the subject of Mr. House, he likes to point out that Wall Street doesn't criticize Fannie because investments bankers are, well, sort of, in on the deal. But after Fannie released its 1Q earnings last week at least one firm, Sanford C. Bernstein & Co., had some less-than-kind words for Fannie. Even though Bernstein is still keen on the stock, it questioned whether Fannie "missed the market" and called its retained loan growth "disappointing." The research report also suggests that Freddie Mac might be a better investment right now than Fannie..
In mid-March short positions in Fannie shot up by 30%...
Over the past decade some commercial banks have exited the residential mortgage market, citing low profit margins. Instead of making mortgages to consumers they've branched out into such high margin (and sexy) businesses like investment banking. But with Wall Street in the tank, many banks are probably wishing they hadn't thrown in the residential towel...
As everyone knows mortgage equities have done well while most of the stock market -- especially tech stocks -- have been decimated. Fannie, Freddie and Countrywide get most of the market's attention, but two recent stand-outs include New Century at $25 a share and LendingTree at $15. In early January New Century was at $14 and the Tree at $6. If you had invested then you would have doubled your money...
IN CASE YOU MISSED IT: Lewis Ranieri, the grand daddy of the MBS, is back in the business. More than a year ago Mr. Ranieri sold his Houston-based thrift, Bank United, to Washington Mutual. Earlier this month Mr. Ranieri and a partner, Tony Nocella bought into Franklin Bank in Austin, Texas, that is...
