Fannie Mae and Freddie Mac have added billions of dollars of mortgage backed securities and home loans to their balance sheets in recent months. That's adding to speculation. They're trying to lower lending rates and boost profitability ahead of a potential secondary offering.Bloomberg's Scott Carpenter covers credit and joins us here on set. Scott, great to have you on, on the program. This is a story that has been persistent because Bill Ackman often tweets about Fannie and Freddie.The president and those ...

Core Insights - Fannie Mae and Freddie Mac have significantly increased their mortgage-backed securities and home loans, aiming to lower lending rates and enhance profitability ahead of a potential secondary offering [1][5]. Company Overview - Fannie Mae and Freddie Mac are large government-sponsored enterprises designed to support the home loan market, facilitating easier access to mortgages [2][3]. - They underwrite over 50% of all mortgages in the U.S., providing financial guarantees on mortgage bonds, which is essential for financing home loans [3]. Financial Activities - In addition to their primary business of providing financial guarantees, they also purchase mortgage bonds and home loans, generating revenue through these investments [4]. - Since June, their investment portfolio has grown by approximately 25%, reaching around $233 billion, within a broader agency mortgage bond market valued at about $9 trillion [5]. Market Expectations - Analysts predict that Fannie Mae and Freddie Mac may add an additional $100 billion to their portfolios, although the exact trajectory remains uncertain due to limited communication from the companies and their regulator [6]. - The strategy of increasing their investment portfolios is seen as a way to improve earnings, which is crucial for any future public offering [7][8].

Core Viewpoint - Michael Burry, a well-known hedge fund manager, is investing in Freddie Mac and Fannie Mae, anticipating a potential relisting of their stocks sooner than expected [1] Group 1: Market Conditions - The mortgage market is showing signs of improvement, with Freddie Mac's Primary Mortgage Market Survey indicating a decrease in the 15-year fixed rate to 5.44% from 5.51%, down from 5.96% a year ago, providing a positive impact on the housing market [2] Group 2: Freddie Mac's Performance - Freddie Mac, a government-sponsored enterprise, is currently trading around $11, reflecting a year-to-date increase of 236% and a 52-week increase of 317%, indicating a significant recovery [4] - The company has a market capitalization of approximately $7 billion, trading at 0.06x price-to-sales compared to a sector median of 3.02x, and at 0.54x price-to-cash-flow versus a sector median of 9.69x, suggesting it is undervalued relative to its peers [5] - In September 2025, Freddie Mac reported sales of $33 billion, with a sales growth of 1.82% from the previous quarter, and a net income of $2.7 billion, up 16.17% quarter-over-quarter, indicating strong profitability and operational leverage [6]

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Fannie Mae and Freddie Mac have added billions of dollars of mortgage-backed securities and home loans to their balance sheets in recent months https://t.co/oFNBQ0Ah58 ...

Core Viewpoint - Mortgage rates are stable, with the 30-year fixed rate at 6.13% and the 15-year fixed rate at 5.53%, despite a recent interest rate cut by the Federal Reserve [1][17]. Current Mortgage Rates - The national average for the 30-year fixed mortgage rate is 6.13% [1][17]. - The 15-year fixed mortgage rate stands at 5.53% [1][17]. - Adjustable-rate mortgages (ARMs) such as the 5/1 ARM are currently at 6.24% [1][17]. Refinance Rates - Refinance rates are generally higher than purchase rates, but specific current refinance rates were not detailed in the provided content [3]. Monthly Payment Implications - For a $300,000 mortgage at a 30-year term with a 6.13% rate, the monthly payment would be approximately $1,824, resulting in $356,569 in interest over the loan's life [7]. - A $300,000 mortgage at a 15-year term with a 5.53% rate would lead to a monthly payment of $2,456, with total interest paid being $142,085 [9]. Adjustable-Rate Mortgages - ARMs typically start with lower rates than fixed-rate mortgages but can increase after the initial fixed period [10][11]. - The 5/1 ARM locks in the rate for the first five years before adjusting annually [10]. Factors Influencing Mortgage Rates - Lenders offer lower rates to borrowers with higher down payments, excellent credit scores, and low debt-to-income ratios [13]. - Options for reducing interest rates include paying for discount points at closing or temporary buydowns [14][15]. Future Rate Predictions - The Mortgage Bankers Association (MBA) forecasts the 30-year mortgage rate to remain around 6.4% through 2026, while Fannie Mae predicts rates above 6% next year, potentially dropping to 5.9% in Q4 2026 [19].

Core Insights - The minimum credit score requirement for conventional loans has been effectively eliminated, allowing broader access to credit for underserved borrowers [1][3][4] Group 1: Changes in Credit Scoring - The Federal Housing Finance Agency (FHFA) has mandated an expansion of credit scoring models used by Freddie Mac and Fannie Mae, which finance over half of U.S. home loans [2] - Fannie Mae removed its minimum credit score requirement on November 15, 2025, as part of an update to its Selling Guide [3] - New credit models, including VantageScore 4.0 and FICO 10T, will be utilized to provide a more comprehensive view of consumer credit behavior [4][6] Group 2: New Credit Models - VantageScore 4.0 and FICO 10T incorporate "trended data" and alternative credit data, which track credit changes over time and consider payment histories for rent, utilities, and phone services [5][6] - These new models aim to expand access to credit for traditionally underserved groups, such as first-time homebuyers and young adults [6][9] Group 3: Underwriting Process - Despite the removal of the minimum credit score requirement, the underwriting process for loan approval remains largely unchanged [7][8] - Lenders still have the option to use traditional FICO scores or the new creditworthiness models, and may not be fully ready to abandon qualifying credit scores [10] Group 4: Impact on Borrowers - Approximately 5 million prospective buyers are estimated to benefit from the new credit modeling [9] - A better credit score can lead to lower mortgage rates, reduced lender fees, and smaller down payments [13]

Core Insights - Mortgage rates are currently near their lowest levels since 2025, with the national average for a 30-year fixed mortgage at 6.22%, down from 6.60% a year ago [1][14] - The 15-year fixed mortgage rate is at 5.54%, compared to 5.84% last year [1][14] - Predictions indicate that mortgage rates will remain above 6% for most of 2026, with a slight dip to 5.9% expected in Q4 2026 [13][15] Current Mortgage Rates - The current national average rates include: - 30-year fixed: 6.22% [1][14] - 15-year fixed: 5.54% [1][14] - 20-year fixed: 5.98% [5] - 5/1 ARM: 6.23% [5] - 7/1 ARM: 6.37% [5] Mortgage Rate Trends - Mortgage rates have generally decreased since the end of May, remaining lower than the same period last year [13] - The Mortgage Bankers Association (MBA) forecasts a 30-year fixed rate of 6.3% for most of 2027, with a slight increase to 6.4% in Q4 2027 [17] Future Projections - Fannie Mae and MBA predict that the 30-year mortgage rate will stay at or above 6% for most of 2026, with a forecasted drop to 5.9% in Q4 2026 [13][15] - The MBA expects rates to remain relatively stable in 2027, with average rates near 6.3% [17]

More excerpts from my piece on Fannie Mae and Freddie Mac. I did provide my unlocked Excel models for full user customization. These are at the end of the article. $FNMA $FMCC https://t.co/QWD5WZrAO3 ...

Market Domination host Josh Lipton breaks down the day's market headlines ahead of the closing bell on December 9, 2025. GammaRoad Capital Partners CIO Jordan Rizzuto joins the program to discuss how an interest rate cut by the Federal Reserve could set up the bond market in 2026. Whalen Global Advisors Chairman Chris Whalen also comes on to talk about Michael Burry's latest commentary on the relisting of Fannie Mae and Freddie Mac. About Yahoo Finance: Yahoo Finance provides free stock ticker data, up-to-d ...