Bloomberg: Fannie And Freddie Shares Tumble

Apr 30, 2020

Man pushing boulder uphill. Credit: iStock.com/NiseriN

Director of Events

Fannie Mae and Freddie Mac could be facing a rough time ahead according to a recent Bloomberg report which revealed the entities' shares dropping rapidly. Shares have dropped over 30% since the end of February, and there could be more battles ahead.

"The companies, which backstop roughly $5 trillion of mortgages, might have to set aside huge amounts of money to cover the risk of souring home loans," wrote Bloomberg's Elizabeth Dexheimer. "They may also take a hit from the pain being inflicted on nonbank mortgage servicers as millions of borrowers delay making their monthly loan payments. Meanwhile, the outlook for the U.S. housing market—the engine that powers Fannie and Freddie’s profits—looks bleak."

This doesn't bode well for Fannie and Freddie investors who have always been backed by the government. Without solid financials and a healthy U.S. economy, Dexheimer believes it will be hard for investors to survive outside of the government's grip.

"This crisis is dashing hopes for a quick exit from conservatorship," said Jaret Seiberg, an analyst at Cowen & Co. "If there’s not a lot of clarity on their losses or capital it’s hard to envision the market providing the $100 billion of fresh capital they would need to raise down the road."

Click here to read more about the challenges Freddie and Fannie are facing.

About the author

Navi Persaud

Director of Events

Navi Persaud is Director of Events at NMP.

Link copied

Published

Apr 30, 2020

Analysis and Data

Redfin: Homebuyers Gain Leverage, But Pending Sales Keep Sliding

Pending sales fall 16.4% from a year ago despite lower home prices and mortgage payments, as sellers retreat from a weakening market

Home prices are falling. Mortgage payments are easing. Sellers are becoming more willing to negotiate. Yet the housing market keeps losing buyers.Pending home sales fell 16.4% year over year during the four weeks ending Nov. 1, reaching their lowest level in Redfin's weekly ...

Tech

New AI-Run Mortgage Startup Builds Database Of 224,000 LOs

LenDb.ai is making LO records available to AI assistants, offering a potential new way for borrowers to find originators

A new mortgage technology startup is betting that borrowers will increasingly turn to artificial intelligence to find a loan originator, and it wants to make sure AI knows whom to recommend.LenDb.ai, launched Thursday by venture studio Draper Goren Blockchain, has assembled ...

Feb

Austin, TX

More from

Industry News

Fed Holds Rates, But Pricing Pressures Persist

Rising Treasury yields and fresh inflation data complicate rate locks, borrower qualification, and lender margins as markets anticipate another hike in December

Industry News

Oct 29, 2026

Zippy Adds Capital For Manufactured-Home Lending Push

The $20 million investment from Saluda Grade will support expansion beyond 27 states and new loan products across wholesale, retail, and community channels

Industry News

Oct 16, 2026

Inflation Hits 3.7%, Putting Mortgage Rate Relief At Risk

September’s inflation pickup puts recent rate improvements at risk, potentially eroding affordability gains from lower home prices and seller concessions

Industry News

Oct 14, 2026

PLACE Acquires Ardley, Expanding Push To Turn Existing Borrowers Into New Loans

The latest deal connects borrower retention technology with Maxwell's origination platform and PLACE's real estate network, creating new opportunities for lenders

Industry News

Oct 09, 2026

Equifax, TransUnion Launch New Tools To Cut Credit Report Costs

Both bureaus introduce ways to purchase credit scores separately from reports, while Equifax reports growing VantageScore adoption and extends $1 pricing through 2028

Industry News

Oct 09, 2026

Newrez, eXp Realty Form Joint Venture To Target Purchase Business

Revenos Mortgage is set to launch in early 2027, replacing eXp's joint venture with Kind Lending

Industry News

Oct 08, 2026

Popular