Bob Ipock
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- North Carolina
Fannie, Freddie to Register Stock with SEC
(July 15) -- The two secondary mortgage market giants Fannie Mae and Freddie Mac have announced that they will register their common stock with the U.S. Securities and Exchange Commission, a move which would requires the companies to file quarterly and annual statements and proxies with the agency as other public companies do.
The government-sponsored entities won't register their debt-and-mortgage-backed securities with the SEC, though, despite the detailed information their competitors on Wall Street offer on their mortgage pools.
Many are concerned about this lack of disclosure because it conceals major market risks from investors, and allows the GSEs to choose the best mortgages for themselves. The absence of disclosure has also prompted investors to implement a risk premium in their pricing, thereby boosting interest rates for homebuyers.
Such disclosures, which would be required under legislation sponsored by Rep. Christopher Shays, R-Conn., and Rep. Edward Markey, D-Mass., would level the playing field, help investors understand the risks taken by the GSEs, make pricing more efficient, and protect taxpayers should Fannie and Freddie find themselves in financial straits.
Source: Wall Street Journal (07/15/02)
(July 15) -- The two secondary mortgage market giants Fannie Mae and Freddie Mac have announced that they will register their common stock with the U.S. Securities and Exchange Commission, a move which would requires the companies to file quarterly and annual statements and proxies with the agency as other public companies do.
The government-sponsored entities won't register their debt-and-mortgage-backed securities with the SEC, though, despite the detailed information their competitors on Wall Street offer on their mortgage pools.
Many are concerned about this lack of disclosure because it conceals major market risks from investors, and allows the GSEs to choose the best mortgages for themselves. The absence of disclosure has also prompted investors to implement a risk premium in their pricing, thereby boosting interest rates for homebuyers.
Such disclosures, which would be required under legislation sponsored by Rep. Christopher Shays, R-Conn., and Rep. Edward Markey, D-Mass., would level the playing field, help investors understand the risks taken by the GSEs, make pricing more efficient, and protect taxpayers should Fannie and Freddie find themselves in financial straits.
Source: Wall Street Journal (07/15/02)
