Fannie Mae, Freddie Mac woes could lead to Fed takeover
Following a slew of funding problems for government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, the federal government is considering taking over the two organizations, according to a report by the New York Times.
The two mortgage companies, which are government-sponsored entities (GSEs), have had difficulty raising funds in the face of the housing market downturn.
According to the report, a plan is under consideration by the Fed to place Fannie Mae and Freddie Mac into conservatorship, which means losses on home loans under their names would be paid by taxpayers. The newspaper cited individuals briefed with the government’s plan, although the sources also said no action is imminent.
Congress created Fannie Mae during the Great Depression and created Freddie Mac in the 1970s. Later, legislators eased some restrictions on the two organizations to help spur growth, allowing them to cash in on the slew of jumbo mortgages that eventually entered the market. Like many other mortgage companies, the two groups were deeply hurt by fallout in the housing market. But unlike other mortgage companies, Fannie Mae and Freddie Mac collectively hold huge relative chunk of the outstanding mortgages in the United States.
Shares of Fannie Mae and Freddie Mac are expected to slide further today, after plunging throughout the week. If the government were to take over the companies, their stock would be worth “little or nothing,” according to the New York Times.
Pier 1 introduces green cleaning products
Starting this month, Pier 1 will be the exclusive U.S. and Canadian distributor of an environmentally friendly line of cleaning products by Isabella Smith.
The Maison Belle line is non-toxic, biodegradable and uses recyclable packaging. The products are fragranced with 100 percent essential oils and don’t contain synthetic perfume.
Pier 1 will sell three of the fragrances — lemon vanilla, lavender mint and grapefruit bergamot — in the glass cleaner, counter top cleaner and dish soap. The products will be available in about 500 Pier 1 Imports locations across the country.
Roofing demand expected to climb
The demand for roofing materials, which contracted sharply in 2006 and 2007 primarily due to the downturn in new residential construction, is expected to grow nearly 2 percent per year through 2012, according to a study by Cleveland-based research firm the Freedonia Group.
The recovery of the residential construction market and an increase in commercial construction will both provide growth, along with residential reroofing, the study said. Through 2012, demand for roofing in nonresidential construction markets is projected to increase more than 1 percent per year, in line with its pace from 2002 to 2007. The office and commercial construction market will provide the greatest growth, driven by increased demand in new construction applications.
While new roofing applications are expected to grow faster through 2012, the majority of demand will continue to come from reroofing applications. In 2012, reroofing will account for three-quarters of total roofing, according to the researchers.
However, reroofing demand is expected to weaken through 2012, due to past construction cycles that reduced the number of buildings requiring routine reroofing over the forecast period.
Roofing tile and plastic roofing are anticipated to see the fastest gains through 2012. Demand for roofing tile will be driven by the recovery of the residential market, especially in the South and West, where roofing tile demand is greatest, according to the study. Demand for plastic roofing (such as thermoplastic polyolefin, PVC and spray polyurethane foam), which is primarily used in nonresidential construction, will increase as plastic materials supplant bituminous low-slope roofing products.
Asphalt shingles will remain the most popular roofing product, owing to their dominant position in the large residential roofing market. Demand for asphalt shingles is expected to accelerate markedly through 2012 as the new residential market recovers. Asphalt shingles are forecast to account for more than 80 percent of residential roofing demand through 2012.
On a regional basis, the West will provide the best prospects for roofing demand through 2012. The West experienced one of the sharpest declines in housing construction in 2006 and 2007 and will benefit the greatest from its recovery. Growth will be led by the Mountain subregion, which is expected to outpace the average in terms of growth in population and economic output.