Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) is moving up after bouncing off $2 support. The stock has been one of the most active and volatile stocks on the entire OTCBB market in recent months. Running from $0.30’s range to highs of $6.35 the stock has already shown us swings well over 2000%
FNMA recently dropped as Billionaire investors that included the likes of the iconic Carl Icahn, Bruce Berkowitz, John Paulson, David Tepper, and Bill Ackman claimed the government acted illegally by making FnF pay them all of their massive profits in the form of dividends; the so-called sweep amendment. More on this later.
Fannie Mae (OTC: FNMA) operates as a government-sponsored enterprise (GSE). The Company conducts business in the U.S. residential mortgage market and the global securities market. It supports market liquidity by securitizing mortgage loans, which means it places loans in a trust and Fannie Mae mortgage-backed securities backed by the mortgage loans are then issued.
Fannie Mae is the largest backer of 30-year fixed-rate mortgages in the Country. FNMA purchases and guarantees mortgages through the secondary mortgage market and pools them to form mortgage-backed securities (MBS). Institutions including insurance companies, pension funds and investment banks purchase its MBS.
Fannie Mae is one of two of the largest purchasers of mortgages on the secondary market. The other is the Federal Home Loan Mortgage Corp., or Freddie Mac. Both are government-sponsored enterprises (GSEs).
Back in 2008 at the height of the credit crisis, FnF were bailed out to the tune of $187.4 Billion and taken over by the federal government. The common stock which was slated to get nothing was delisted to the OTCBB where it initially began trading for $0.30 per share.
Federal National Mortgage Equity Analysis
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) opened trading today as $2.32 and is trading in the range of 2.07-2.58 today. Federal National Mortgage’s current market cap stands at $13.31 billion.
Federal National Mortgage mean target price is $2.00 according to First Call. This presents a downside to the current price of the equity. The Mean Recommendation sits at 4.0
The current quarter EPS consensus estimate is .45 with revenue estimates of 4.99 B. Sales are expected to grow at a 2.90% rate. Federal National Mortgage reported actual earnings last quarter of 0.68 which beats the .46 consensus estimate, a 47.80% surprise.
Federal National Mortgage Association (Fannie Mae) provides liquidity and stability support services for the mortgage market in the United States. The company securitizes mortgage loans originated by lenders into Fannie Mae mortgage-backed securities (Fannie Mae MBS). The companys Single-Family Credit Guaranty segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, and other mortgage-related securities, as well as provides single-family mortgage servicing, REO management, and lender repurchase evaluation services. Its Multifamily segment securitizes multifamily mortgage loans into Fannie Mae MBS; purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities. This segment also offers debt financing structures to facilitate construction loans; delegated underwriting and servicing; and multifamily mortgage servicing services. The companys Capital Markets segment manages its mortgage-related assets and other interest-earning non-mortgage investments. This segment provides funds to the mortgage market through short-term financing and investing activities that include whole loan conduit transactions, early funding transactions, real estate mortgage investment conduit and other structured securitization activities, and mortgage-backed securities trading services. Fannie Mae serves mortgage banking companies, savings and loan associations, savings banks, commercial banks, credit unions, community banks, insurance companies, and state and local housing finance agencies.