Franklin Raines
Franklin Raines
Franklin Delano "Frank" Rainesis an American business executive. He is the former chairman and chief executive officer of the Federal National Mortgage Association, commonly known as Fannie Mae, who served as White House budget director under President Bill Clinton. His role leading Fannie Mae has come under scrutiny. He has been called one of the "25 People to Blame for the Financial Crisis" according to Time magazine...
NationalityAmerican
ProfessionBusinessman
Date of Birth14 January 1949
CountryUnited States of America
accounting although company determined early efforts faith good held knowledge mistakes
Although to my knowledge the company has always made good faith efforts to get its accounting right, the SEC has determined that mistakes were made. By my early retirement, I have held myself accountable.
affect automated billion bit companies expensive fun half internet invested largest last million money mortgage moving obligation people quite sector using year
The mortgage is the largest obligation that people take on and it's very expensive to get a mortgage and very painful. It's not a fun process. So we've invested quite a bit of money in using the Internet and e-commerce to make it easier. Fannie Mae has become one of the largest e-commerce companies in the world. Last year, we underwrote through automated underwriting and electronically, two and a half million loans, $300 billion of transactions. This year will be over $400 billion. So e-commerce is moving into the mortgage sector and it's going to affect everybody.
basis beat believe believes fed funds good housing interest market percent points question raise rates rise unsure whether year
I think the Fed is going to raise interest rates over the rest of this year. I think it will go up at least 100 basis points before the year is out. So the Fed funds rate will rise from about 6 percent to at least 7 percent. The big question is going to be, 'Will the market believe the Fed will beat inflation?' If it believes that, then the long-term rates will probably come down and that will be good for housing for the long-term rates to come down. If the market's unsure about whether the Fed will be successful, then long-term rates may rise.
buying economy existing families good homes interest optimism people record risen shows strength though time underlying
People are buying new homes, existing homes at record levels. And that just shows the underlying strength of the economy and the optimism of families that this is still a good time to buy a home even though interest ratesÊ on mortgages have risen substantially,
happen hope tendency
When they had difficulties they've had a tendency to lurch to the right and out of the mainstream, and we hope that doesn't happen this time,
children kids economy
Well, there are about 10 million children that aren't covered by health insurance. About 3 million qualify for Medicaid but don't get it, so we're going to reach out and bring more of those kids into the Medicaid program.
thinking years down-and
We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.
years mortgage reduction
Well, we're just now seeing the reductions in mortgage rates. The mortgage rates are based on the ten-year rate and the Fed controls the overnight or the shorter rates.
strong results produce
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.
danger interest rate
And so the danger for the housing industry is if we see interest rates rise.
stimulus increase be-careful
And so we have to be careful with looking at additional stimulus that we don't provoke an increase in the bond rate and then offset a lot of the stimulus we've already got.
thinking years risk
I think if you go beyond a year - if this continues into the system in the out years, I think there is a risk and that - that we could have a negative reaction in the bond market and that will offset the good that was attempted to be done.
moving long individual
Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.
thinking medicine would-be
So from the housing standpoint, steady as you go, I think, would be the best medicine.