Freddie Mac is reporting a foreclosure suspension valid thru February 28th, 2006.
McLean, VA – Freddie Mac is extending through February 28, 2006 its foreclosure suspension on mortgages on homes in Hurricane Katrina and Rita disaster areas and adopting other policies so servicers can continue to extend “the highest level of understanding” to storm victims seeking to extend the mortgage payment suspension period that expires today December 1, says a November 30 policy Bulletin issued by the company. The new Bulletin only applies to Freddie Mac-owned loans on homes in major disaster areas designated by FEMA as qualifying for individual assistance.
The mandatory forbearance and foreclosure suspensions adopted after Hurricanes Katrina and Rita have helped several thousand borrowers cope with the aftermath of the two storms.
Freddie Mac is scared to death about bankruptcies and write-offs related to Katrina and Rita. As long as Freddie Mac can avoid write-offs of the obvious, they might be able to prolong the agony. Perhaps in the meantime the US government will make good on all outstanding loans in the hurricane areas. I doubt it, but perhaps that is the prayer.
In other news Freddie Mac Increases Common Stock Dividend by 34 Percent.
The board of directors of Freddie Mac today declared a $0.47 per share quarterly dividend on the company’s voting common stock, a $0.12, or 34 percent, increase in the quarterly dividend. In addition, the company provided an update on financial trends and business performance for the third quarter of 2005. The common stock dividend action is the third increase in two years, with a cumulative dividend increase of approximately 81 percent since December 2003.
One can only wonder if Freddie is delusional or if this is some kind of ploy related to the above prayers. A 34% increase in dividend yield “sounds” spectacular until one sees that this dramatic increase will still leave the yield shy of 3%.
Wasn’t there a time when dividend yields really mattered?
Oh well, that was so long ago that no one cares now.
Now we care about growth regardless of how expensive it might be.
Unfortunately the FED is still trying to rein in growth of GSEs.
Does anyone remember that?
One might also note that one can get over 4% guaranteed on 6 month treasuries without worrying about whether or not the GSEs will implode.
If you buy Freddie Mac based on this dividend yield increase, I suggest you do what they are doing. Pray.
Mike Shedlock / Mish/