As the European economy portrays a disheveled look, Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) will give a chance to European investors to participate in the U.S. mortgage market. The housing finance company has announced that it may soon list all of its risk-sharing mortgage bonds on the Irish Stock Exchange. The company informed that it had earlier listed Connecticut Avenue Securities Series 2014-C04 notes on the Irish Stock Exchange back in 2014. After which, the company plans to add Series 2013-C01, 2014-C01, 2014-C02, 2014-C03 and 2015-C01 notes on the exchange.
Controlled risk
For listing these bonds, Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) said that it will maintain adequate credit risk in each of its CAS offerings. It said to ensure that it complies with the European Union’s risk retention norms. Laural Davis, Vice President for credit risk transfer at the company, said that they by listing bonds on the exchange, the company has been able to bring greater participation from the investors in Europe. She said that the move is part of the company’s plan to expand its investor base under the program.
Problems in home
Another objective of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) to extend the listing of bonds to European exchange is to reduce the taxpayers’ liability in the U.S. The goal is one of the chief objectives laid down by the Federal Housing Finance Agency (FHFA) for the government-sponsored enterprise. Moreover, the objective of reducing taxpayer risk forms 30% of the FHFA’s report card for the GSEs.
Separately, Senator Richard Shelby has already let the word out that he will better keep Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac under the U.S. conservatorship rather than allowing government to back the mortgages. Shelby’s comments have confirmed that there are fewer chances of the two housing finance companies to come out of their existing arrangement for the next two years. Hence, the pressure is on FHFA to rebuild the two companies and going Europe appears to be one such fix to the problem.
