Getty Images We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their homes during these dark days. Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the economy's surface. The sector this potential crisis is in isn't as large as the subprime mortgage sector, but it's still a $27 billion sector, according to Forbes magazine. In fact, Forbes reports that 1 in 4 Americans may be participants in this potential crisis. Driving Toward a New Economic Cliff I became aware of this potential time bomb last year. A close friend was financially destroyed by the subprime mortgage crisis. He is an investor and was overleveraged on more than a dozen investment properties. He was finally forced to declare bankruptcy to get out from under the mountain of debt. Within a week of the bankruptcy filing, he started getting letters from companies like Wells Fargo (WFC) and General Motors (GM). While my friend was used to getting nasty letters from banks and finance companies, these letters were very different. These were not demand letters challenging his bankruptcy, threatening lawsuits or anything the least bit negative. Believe it or not, these letters were pre-approval letters for auto credit! In fact, one financial company actually sent my bankrupt friend a check for $30,000 to be used at any participating auto dealer for the car of his choice. He took the check and bought a used BMW. I couldn't believe it. Here's a bankrupt guy with a credit score in the low 400s, working a menial labor job, with automobile credit being thrown at him by several large and reputable lenders. These were not the "buy here, pay here" sharks at the corner used-car lot. While I was happy for my friend, I was reminded strongly of the subprime mortgage crisis. Folks with really bad credit and sketchy employment were able to get mortgages that they really couldn't afford during the subprime mortgage crisis. Now the same thing is happening with auto loans. The Numbers Behind the Looming Bust I have started to see more and more advertising for this type of lending, raising the question of whether the subprime auto loan market will explode like the subprime mortgage market. I wondered, if this situation is truly a financial bubble, when will it burst -- and how can I best position myself to profit? After asking these questions, I thought of John Paulson making $3.7 billion during the collapse of the subprime mortgage market. The thought of replicating just a tiny fraction of Paulson's success motivated me to find the answer. Here's what I discovered. Bloomberg has reported the average loan to value, or LTV, for subprime auto loans has increased to 114.5 percent this year from 112 percent in 2010. Loan to value is a measure of the money lent as a percentage of the market value of the asset. A 114.5 percent LTV means that the auto loan is for 14.5 percent more than the actual value of the car. For comparison, the average LTV of subprime auto loans in 2008 maxed out at 121 percent. This increase in LTV is signaling greater competition and a decrease in underwriting guidelines in the subprime auto sector. In other words, more and riskier loans are being made. Subprime auto lender Exeter Finance, recently acquired by the Blackstone Group (BX), has reported an increase in late payments from 5 percent in 2012 to 7.8 percent this year. However, it's important to note that subprime lenders Banco Santander's (SAN) U.S. consumer unit and GM Financial have reported lower loan losses from 2010 loans than losses from loans originated in 2007 and 2008. How to Profit If the Bubble Bursts GM, which is heavily involved in subprime lending, has improved dramatically since its pre-bailout days. The company has posted more than $1 billion in net income in each of the past four quarters. However, 88 percent of GM's North American consumer finance receivables are firmly in the subprime category. In fact, GM listed consumer receivables 31 or more days late at $1.1 billion, a 34 percent increase from last year. Making matters worse, auto dealers with weak financials currently owe GM nearly $1.6 billion, per Bloomberg. This is up from just $12 million, indicating a radical increase. The question is, can GM remain profitable after the U.S. Treasury pulls completely out? Remember, the Treasury Department filed its final plan to close out its GM holdings in September. I think GM made the mistake of placing short-term profits before long-term goals with its aggressive pursuit of highly risky subprime loans. As more and more subprime borrowers default, GM's bottom line will be hurt substantially. No company can withstand massive defaults of loans. The technical picture shows a double top in the $41.50 range on the daily chart. I would not be surprised to see General Motors trading at $28 within the next 15 months.
5 Best Consumer Service Stocks To Invest In Right Now: Soligenix Inc (SNGX.OB)
Soligenix, Inc., incorporated on January 16, 1987, is a development-stage biopharmaceutical company. The Company is focused on developing products to treat the side effects of cancer treatment and gastrointestinal diseases, as well as developing several biodefense vaccines and therapeutics. The Company operates in two business segments: BioTherapeutics and BioDefense. As of December 31, 2011, the Company�� products, which were under development, include orBec, SGX201, SGX203, LPM Leuprolide, ThermoVax, RiVax and SGX202. On September 15, 2011 the Company's Phase III clinical trial for orBec in the treatment of gastrointestinal Graft-versus-Host disease (GI GVHD). In addition, the Company is developing oral BDP in other therapeutic indications, such as pediatric Crohn's disease and radiation enteritis.
BioTherapeutics Overview
The Company's BioTherapeutics business segment focuses to develop orBec (oral beclomethasone dipropionate( oral BDP)) and other biotherapeutic products, while the Company's collaboration partner, Sigma-Tau Pharmaceuticals, Inc. (Sigma-Tau) will commercialize orBec and oral BDP in North America and Europe, if approved. orBec represents a first-of-its-kind oral, locally acting therapy tailored to treat the gastrointestinal manifestation of Graft-versus-Host disease (GVHD). orBec is formulated for oral administration as a single product consist of two tablets. SGX201 is a delayed-release formulation of beclomethasone dipropionate (BDP) specifically designed for oral use. SGX203 is a two pill delivery system of a delayed release formulation of BDP specifically designed for oral use that allows for delivery of immediate and delayed release BDP throughout the small bowel and the colon. The Company's Lipid Polymer Micelle (LPM) oral drug delivery system is a platform technology.
Vaccines/BioDefense Overview
The Company's Vaccines/BioDefense business segment includes RiVa x, the Company's ricin toxin vaccine, and SGX204, its anthr! a! x vaccine, and SGX202, its gastrointestinal acute radiation syndrome (GI ARS) program. The Company�� Thermostability technology, ThermoVax, is a method of rendering aluminum salt, Alum, adjuvanted vaccines stable at elevated temperatures. SGX204 is the Company�� acquired vaccine based on a recombinant Protective Antigen (rPA) derivative. RiVax is the Company�� vaccine developed to protect against exposure to ricin toxin. SGX202 is an oral immediate and delayed release formulation of the corticosteroid beclomethasone dipropionate (BDP) is being developed for the treatment of GI ARS.
The Company competes with Genzyme, Abgenix, and PDL BioPharma, Inc., Kiadis Pharma, Chiesi Pharmaceuticals, Bill and Melinda Gates Foundation and PATH, Kansas University Macromolecular and Vaccine Stabilization Center, Variation Biotechnologies, Inc, Emergent BioSolutions, Inc, Pharmathene, Dynavax, Panacea Biotech, Paxvax, Elusys Therapeutics, Pfenex, Compass Biotech, Endo Ph armaceuticals, Human Genome Sciences, Elusys Therapeutics, Medarex, Bavarian Nordic, the U.S. Army Medical Research Institute of Infectious Diseases, Cleveland Biolabs, Aeolus Pharmaceuticals, Boulder Biotechnology, RxBio, Inc., Exponential Biotherapies Inc., Osiris Therapeutics, Inc., ImmuneRegen BioSciences, Inc., Neumedicines, Inc., Cellerant Therapeutics, Onconova Therapeutics, Inc., Araim Pharmaceuticals, Inc., EVA Pharmaceuticals, Terapio, Cangene Corporation, Humanetics Corporation, the University of Arkansas Medical Sciences Center, Novartis, Medimmune, and Ariad.
5 Best Consumer Service Stocks To Invest In Right Now: The KEYW Holding Corporation(KEYW)
The KEYW Holding Corporation, through its subsidiaries, provides mission-critical cybersecurity and cyber superiority solutions to defense, intelligence, and national security agencies in the United States. Its solutions, services, and products support the collection, processing, analysis, and use of intelligence data and information in the domain of cyberspace. The company offers engineering services and solutions to solve discreet and complex cybersecurity, cyber superiority, and intelligence challenges; and specialized training, field support, and test and evaluation services. The KEYW Holding Corporation is also involved in collecting data and information in cyberspace encompassing the entire electromagnetic spectrum; processing data and information from cyberspace to make it accessible to a range of analytical needs and resources; analyzing data and information that is collected, processed, correlated, and made accessible to transform them into usable information for its customers. In addition, it impacts or creates integrated intelligence data and information, which is used in observing, preventing, and responding to known and emerging threat events, actions, and agents in a real time. Further, the company engages in the development, integration, deployment, and sustainment of agile airborne intelligence, surveillance, and reconnaissance collection platforms to austere environments. Additionally, it develops and sells hardware products to create intelligence insight and capture information that help identify, locate, and monitor activity to its intelligence agency customers. The KEYW Holding Corporation is headquartered in Hanover, Maryland.
Advisors' Opinion:- [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on KEYW Holding (Nasdaq: KEYW ) , whose recent revenue and earnings are plotted below. - [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on KEYW Holding (Nasdaq: KEYW ) , whose recent revenue and earnings are plotted below. - [By Seth Jayson]
KEYW Holding (Nasdaq: KEYW ) reported earnings on April 30. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), KEYW Holding beat expectations on revenues and missed expectations on earnings per share.
Top 5 Low Price Stocks To Invest In 2015: ASHMORE GROUP ORD GBP0.0001 WI(ASHM.L)
Ashmore Group plc is a publicly owned investment manager. The firm through its subsidiaries invests in the public equity, fixed income, and currency markets across the globe. It typically makes its fixed income investments in corporate and external debt. The firm makes its currency investments in domestic currency and domestic currency denominated debt. It also employs a special situation investing approach to invest in corporate restructurings through distressed debt, private and public equity, and equity-linked securities. The firm employs a top down and bottom up approach to make its investments. It obtains external research to compliment its in-house research. Ashmore Group Plc was founded in 1992 and is based in London, United Kingdom.
5 Best Consumer Service Stocks To Invest In Right Now: DiaMedica Inc (DMA.V)
DiaMedica Inc. (DiaMedica) is a development-stage company. The Company is a biopharmaceutical company engaged in the discovery and development of drugs for the treatment of diabetes and related diseases. DiaMedica's compound, DM-199, is a recombinant human protein for the treatment of both Type I and Type II diabetes and their complications. DiaMedica is starting a Phase I/II clinical trial for DM-199. DM-199 is a recombinant human protein, which improves glucose control, protects beta cells through the expansion of a population of antigen-specific immunosuppressive cells (Tregs), and proliferates insulin producing beta cells through the activation of certain growth factors. The Company�� DM-204 is a G-protein-coupled receptor agonist (GPCR) monoclonal antibody to treat Type II diabetes and some of the associated complication's. activating a receptor resulted in insulin sensitivity, insulin secretion and vasodilation.
5 Best Consumer Service Stocks To Invest In Right Now: Health Management Associates Inc.(HMA)
Health Management Associates, Inc., through its subsidiaries, engages in the operation of general acute care hospitals and other health care facilities in non-urban communities in the United States. Its hospitals provide services, including general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, and pediatric services. The company also offers outpatient services, such as one-day surgery, laboratory, x-ray, respiratory therapy, cardiology, and physical therapy. In addition, its hospitals provide specialty services in cardiology, neuro-surgery, oncology, radiation therapy, computer-assisted tomography scanning, magnetic resonance imaging, lithotripsy, and full-service obstetrics. As of December 31, 2011, the company operated 66 hospitals with a total of 10,330 licensed beds in non-urban communities in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Washington, and West Virginia. Health Management Associates was founded in 1977 and is based in Naples, Florida.
Advisors' Opinion:- [By Keith Speights]
Another potential issue stems from the possibility that hospitals could push doctors in their employment to pump up numbers of admissions and tests. Health Management Associates (NYSE: HMA ) is under investigation in several states for possible actions including the "medical necessity of emergency room tests and patient admissions." A 60 Minutes story in December focused on some of these alleged admissions issues. The company disputes these accusations.
- [By Lauren Pollock]
Health Management Associates Inc.(HMA) said its newly constituted board is evaluating its $3.9 billion deal to be acquired by fellow hospital operator Community Health Systems Inc.(CYH) The review comes about a month after hedge fund Glenview Capital Management LLC gained shareholder approval to replace the hospital operator’s entire board. But its agreement earlier this year to be acquired by rival Community Health didn’t appease Glenview, which also is the top shareholder in Community Health.
5 Best Consumer Service Stocks To Invest In Right Now: FirstMerit Corporation(FMER)
FirstMerit Corporation operates as the bank holding company for FirstMerit Bank, N.A. that provides a range of banking, fiduciary, financial, insurance, and investment services to corporate, institutional, and individual customers in northern and central Ohio, and western Pennsylvania. The company?s commercial business offers commercial term loans, revolving credit arrangements, asset-based lending, leasing, commercial mortgages, real estate construction lending, letters of credit, cash management services, and other depository products. Its retail business provides various financial products and services, including consumer direct and indirect installment loans, debit and credit cards, debit gift cards, residential mortgage loans, home equity loans and lines of credit, fixed and variable annuities, and ATM network services, as well as deposit products comprising checking, savings, money market accounts, and certificates of deposit. The company?s wealth business provides a sset management, private banking, financial planning, estate settlement and administration, and credit and deposit products and services. FirstMerit Corporation also offers trust and investment services, including personal trust and planning, and investment management; retirement plan services; retail mutual funds, other securities, variable and fixed annuities, personal disability and life insurance products, and brokerage services; and private banking services, including credit, deposit, and asset management solutions. As of December 31, 2009, it operated a network of 160 full service banking offices and 182 ATMs. The company was founded in 1855 and is headquartered in Akron, Ohio.
Advisors' Opinion:- [By Tim Melvin]
The year ahead should be a great one for the smaller bank stocks. Larger regionals like Huntington Bancorp (HBAN) and Capital Ban Financial (CBF) have made it clear they intend to grow by acquisition in the years ahead. Banks like First Merit (FMER) and First Merchants (FRME) have done deals in the past year and are open to doing more to increase their market share and footprints. This should be the year the floodgates open and we see the first wave of merger activity in small banks.
5 Best Consumer Service Stocks To Invest In Right Now: Baxano Surgical Inc (BAXS.W)
Baxano Surgical Inc, formerly TranS1 Inc., incorporated in May 2000, is a medical device company focused on designing, developing and marketing products that implement its approach to treat degenerative conditions of the spine affecting the lower lumbar region. It develops its pre-sacral approach to allow spine surgeons to access and treat intervertebral spaces without compromising important surrounding soft tissue, nerves and bone structures. As of December 31, 2011, the Company was marketing the AxiaLIF family of products for single and multilevel lumbar fusion, the Vectre and Avatar lumbar posterior fixation systems and Bi-Ostetic bone void filler, a biologics product. All of the Company�� AxiaLIF products are delivered using its pre-sacral approach. It generates revenue from the sales of itsimplants and disposable surgical instruments. It has two distinct sales methods. The first method is when implants and/or disposable surgical instruments are sold directly to h ospitals or surgical centers for the purpose of conducting a scheduled surgery. In November 2011, the Company launched its VEO Lateral Access and Interbody Fusion System.
The Company sells its products directly to hospitals and surgical centers in the United States and certain European countries, and to independent distributors elsewhere. The Company also markets its products at various industry conferences and through industry organized surgical training course. The Company has developed and markets two fusion products that are delivered using its pre-sacral approach include AxiaLIF 1L and AxiaLIF 2L+. Its products include surgical instruments for creating an access route to the L4/L5/S1 vertebral bodies, fusion implants, as well as supplemental stabilization products.
AxiaLIF Lumbar Fusion Implants
The Company markets AxiaLIF family of products for single and two level lumbar fusion, the VEO lateral access and interbody fusion system , the Vectre and Avatar posterior fixation systems and Bi-! Os! tetic bone void filler, a biologics product. The Company also market products that may be used with its AxiaLIF surgical approach, including bowel retractors, a bone graft harvesting system and additional discectomy tools. Its AxiaLIF implants and instruments, combined with facet screws or pedicle screws, provide surgeons with the tools necessary to perform a lumbar fusion.
The Company's AxiaLIF 1L and AxiaLIF 2L+ implants are threaded titanium rods, that come in varying lengths to enable one-level L5/S1 fusions and two-level L4/L5/S1 fusions. As they are implanted, its design allows for the separation of the vertebrae to restore disc height.
VEO Lateral Access and Interbody Fusion System
This system features a two-stage retraction method that focuses on nerve visualization followed by controlled retraction. The VEO Lateral System is designed for direct visualization of the psoas muscles and adjacent nerves prior to muscle dissection, and features a full range of PEEK lateral interbody implants and a variety of ergonomic instruments.
TranS1 Access and Disc Preparation Instruments
The Company�� pre-sacral approach requires the use of a sterile set of surgical instruments that are used to create a safe and reproducible working channel and to prepare the disc and vertebrae for its implant. The instrumentation contained in the set includes stainless steel navigation tools and tubular dissectors to create the working channel, as well as nitinol cutters and brushes to cut and remove the degenerated disc material and prepares the disc space for its implant and the bone graft material.
Vectre Facet Screw System
The Company's Vectre facet screw system offers a cannulated facet screw inserted over a guidewire to provide stability while reducing the muscle and tissue trauma associated with conventional pedicle screws. The Vectre system features offer a reproducib le posterior fixation option in select patients.
!
! AVATAR ! Pedicle Screw SystemIn January 2010, the Company entered into an agreement to distribute Avatar, a pedicle screw system. Avatar can be used with or without its implants to provide lumbar posterior fixation. The AVATAR MIS System offers cannulated pedicle screws inserted over a guidewire to reduce muscle and tissue trauma. Extended tabs integrated to the screws provide a pathway for implantation of the rod while minimizing tissue dissection.
Bi-Ostetic Bone Void Filler
In February 2010, TranS1 entered into an agreement to sell Bi-Ostetic, an osteoconductive bone substitute. Bi-Ostetic is an alternative to allografts or cadaver bone. The spongy granules are bioceramics with interconnected porosity that mimic the cancellous bone structure.
Iliac Crest Bone Graft Harvesting System
The Company�� Iliac Crest Bone Graft Harvesting System is developed to aid surgeons in harvesting iliac crest autograft via a minimal ly invasive approach. Use of autograft, which is osteogenic, osteoinductive and osteoconductive, further improves the chances of fusion success. It provides structural support as well as scaffolding for new bone growth.
The Company competes with Medtronic Sofamor Danek, Johnson & Johnson DePuy Spine, Stryker Spine, NuVasive, Zimmer Spine, Synthes, Orthofix International, Globus Medical and Alphatec Spine.
5 Best Consumer Service Stocks To Invest In Right Now: Rye Patch Gold Corp (RPM.V)
Rye Patch Gold Corp., an exploration stage company, engages in the acquisition and exploration of mineral properties in Nevada, the United States. The company primarily explores for gold and silver deposits. It holds interests in the Wilco, Lincoln Hill/Gold Ridge, Jessup, Patty, Garden Gate Pass, and South Coal Canyon projects covering an area of approximately 175 square kilometers located in Nevada. Rye Patch Gold Corp. was incorporated in 2006 and is headquartered in Vancouver, Canada.
5 Best Consumer Service Stocks To Invest In Right Now: London Stock Exchange(LSE.L)
London Stock Exchange Group plc, together with its subsidiaries, engages in the admission of securities to trading; the delivery of trading systems; clearing and settlement of trading in securities; the organization and regulation of markets in securities; and the provision of real time data and other information products, and technology services. It operates in four segments: Capital Markets, Post Trade Services, Information Services, and Technology Services. The Capital Markets segment facilitates the companies to raise capital, including equity and debt, as well as provides liquid secondary markets for the trading. This segment operates through the Main Market, which offers listing and trading of equity, debt, and other securities; AIM, an equities market for smaller growing companies; Professional Securities Market that provides listing of debt and depository receipts to professional investors; and Specialist Fund Market that provides listing of specialized investment funds. It has 2,938 companies listed or admitted on its markets. The Post Trade Services segment provides various risk management and trade processing services to ensure the completion of trades and custody of assets. It also offers clearing, settlement, and custody services for equity, derivative, and fixed income securities on various platforms and for over the counter products. The Information Services segment provides real time data and other information products, including reference data, indices and desktop solutions for trading participants and investors. The Technology Services segment ensures speed, performance, security, and flexibility of trading, as well as sells systems to third parties. It also offers technology connections and data centre services for clients as well as technology and enterprise services sales to third parties worldwide. London Stock Exchange Group plc was founded in 1698 and is headquartered in London, the United Kingdom.
5 Best Consumer Service Stocks To Invest In Right Now: Federal National Mortgage Association (FNMA)
Federal National Mortgage Association (Fannie Mae) is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.
The Company obtains funds to support its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��
Single-Family Business
Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business also works with its Capital Markets group to facilitate the pu! rchase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.
The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. Its Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.
Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of ownership interests, respond to requests for partial releases of s! ecurity, ! and handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.
Multifamily Mortgage Business
Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this business. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.
The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, multifamily mortgage servicing is performed by the lenders who! sell the! mortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.
Capital Markets
Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment conduit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.
Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portfolio. The Company�� Capital Markets group creates single-clas! s and mul! ti-class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.
Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets group funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.
The Company competes with Freddie Mac, FHA and Ginnie Mae.
Advisors' Opinion:- [By Shayndi Raice]
The Department of Justice and Bank of America(BAC) will go head-to-head Tuesday morning as the government attempts to hold the bank liable for allegedly misrepresenting the quality of loans sold to mortgage-finance firms Fannie Mae(FNMA) and Freddie Mac(FMCC).
- [By Sue Chang]
On Friday, the Journal reported that the bank agreed to pay roughly $4 billion to the Federal Housing Finance Agency to settle claims that it misled Fannie Mae (FNMA) and Freddie Mac (FMCC) �about the quality of loans sold to them ahead of the 2008 financial crisis.
5 Best Consumer Service Stocks To Invest In Right Now: Malbex Resources Inc(MBG.V)
Malbex Resources Inc., an exploration stage company, engages in the acquisition, exploration, and development of precious metal projects in Argentina and Peru. The company primarily explores for gold and silver. Its principal property includes Del Carmen project that covers approximately 15,129 hectares located near the southern end of the El Indio Gold Belt, Argentina. The company is headquartered in Toronto, Canada.
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