EDU Articles
Learn about investing, trading, retirement, banking, personal finance and more.
What is the FHFA?
The Federal Housing Finance Association is the Conservator of Fannie Mae and Freddie Mac since the 2008 meltdown.
The FHFA was established as an independent government entity to oversee the secondary mortgage market. The FHFA is a regulatory agency which took over for the Federal Housing Finance Board and the Office of Federal Housing Enterprise Oversight (OFHEO).
It was created in 2008 by the Housing and Economic Recovery Act (HERA), and it oversees the operations of Freddie Mac, Fannie Mae, and the 11 federal home loan (FHL) banks. If you’ll recall, Fannie Mae and Freddie Mac provide liquidity to banks and transfer risk from them by buying their mortgage cash flows from them.
They then pool and tranche the mortgages in to securitized form (such as collateralized mortgage obligations, or CMOs // See: CDOs) for sale to investors. This was a large part of the problem that erupted in the crash of 2008, as bad debts were improperly rated and were separated by several degrees from their sources, so that investors, including institutional investors, didn’t always know what they were getting.
The FHFA regulates the secondary mortgage market and keeps Fannie Mae and Freddie Mac solvent and under close supervision.
What is defined as a market correction?
A market correction is typically a sharp, sudden decline in stock prices, where they fall in value by around 10% - 20%
What is Directional Movement Index (DMI)?
DMI combines average directional index (ADX), plus directional indicator (+DI) and minus directional indicator (-DI)
What is a C-Corporation?
C-corps are generally the larger, more established companies in the country – most publicly-traded companies are C-corps
Can You Sell a Bond for Less Than the Price You Paid For It?
Yes, if you sell the bond before its maturity, it’s possible that you would have to sell it at a discount. If you...
How Do I Invest Money in My Cash-Balance Plan?
Employees do not have control of their own accounts in a Cash Balance plan, but they can possibly influence contribution
Should I invest in commodities?
While investing in commodities may significantly diversify your portfolio, it requires profound knowledge of the assets
What are the Withdrawal Rules for My SEP IRA?
SEP IRAs are subject to the same withdrawal rules as Traditional IRAs
What is Adjusted Book Value?
Adjusted Book Value takes true fair market value of all assets and liabilities into account. Used when facing bankruptcy
What is IRS Publication 505, Tax Withholding and Estimated Tax?
Publication 505 serves as a guide to make sure all goes smoothly for people and their withholding requirements
What is the Ascending Triangle (Bullish) Pattern?
The Ascending Triangle pattern forms when a stock price tests a resistance level and creates a horizontal top line