Farmer Mac lost $23 million in the third quarter due to changes in the fair market value of its financial derivatives. But the company does not include its derivative positions in what it terms its core earnings, which showed a profit of $11 million, up from $8 million for the same period in 2010.
In GAAP terms, Farmer Mac earned $6 million for the third quarter 2010.
During the quarter, Farmer Mac purchased $68 million of Farmer Mac I loans; purchased $1 billion of AgVantage securities, placed $267 million under long-term standby purchase commitments; bought $87 million of U.S. Department of Agriculture-guaranteed portions of loans; and $32 million in rural utilities loans.
The majority of the LTSPC placements came from a single $160 million loan. Farmer Mac said lender interest in LTSPC is increasing as a tool for them to manage their commodity concentration, borrower exposure levels and overall credit risk.
The AgVantage purchases will be on the company’s balance sheet and contribute to net interest income and net yield. These replace $1 billion of maturing AgVantage securities accounted for as off-balance sheet guarantees.
The 90-day delinquency rate in the Farmer Mac I program improved by 25 basis points during the third quarter to $45 million or 1.02%.
Daily Briefing | Thursday, November 10, 2011
Ocwen to Raise Equity, Agrees to Buy $15B of MSRs from JPM
Ocwen Financial Corp. this morning said it would raise $375 million of new equity and use some of the proceeds to buy $15 billion of mortgage servicing rights from JPMorgan Chase Co.
Bad News/Good News on Foreclosure Filings
Foreclosure filings increased 7% in October from the prior month with servicers and banks recording default notices, scheduled auctions, and lender repossessions on 230,678 U.S. properties, according to new figures compiled by RealtyTrac.
Average 30-year Rate Drops Below 4% Again
The average rate for a 30-year fixed rate mortgage during the week ending Nov. 10 came in below 4% for the second time this year, remaining near record lows.
FHFA Responds to Criticism of GSE Bonuses
The bonuses paid to Fannie Mae and Freddie Mac executives are structured to retain managers who have the skills to run the giant mortgage companies, according to a letter Federal Housing Finance Agency acting director Edward DeMarco sent to several senators on Thursday.
Radian Gaining Market Share
Radian Guaranty’s efforts to build market share seem to be paying off in a big way. The company had nearly $2.1 billion of primary mortgage insurance written during October, up from $1.2 billion written for the same month one year prior.
Fiserv: More Room to Fall for Home Prices
Home prices, which have fallen nearly 6% over the past four quarters (ending June 30), could fall another 3.6% by the second quarter of next year, according to analysts at Fiserv, which owns and generates the Case/Shiller house price indexes.
CRE May Perform Better Than Expected
The residential mortgage-backed securities and related collateralized debt obligation sectors lead the pack in both realized and expected future credit losses from U.S. structured finance issuances, according to Fitch Ratings. But it added commercial MBS are expected to experience losses at a lower level than many may have anticipated.
GAO Asked to Study Costs of Financial Crisis
For more than a year, Republicans have been hammering Democrats for what they say are the hefty economic costs of new financial regulations.
Covered Bond Bill Introduced in the Senate
A bipartisan group of senators, including Bob Corker (R-Tenn.), Mike Crapo (R-Idaho), Kay Hagan (D-N.C.), and Charles Schumer (D-N.Y.), Wednesday sponsored new legislation that would set up a covered bond framework in the U.S.
New Wells Fargo Unit Will Finance REITs
Wells Fargo Co. this week launched a new unit to provide financial services to publicly traded real estate investment trusts involved in commercial properties.