MW: Obama win is positive for mortgage insurers, negative for banks: analyst
President Barack Obama’s re-election Tuesday is broadly positive for mortgage insurers and negative for banks, Guggenheim Securities analyst Jaret Seiberg said Wednesday.
Seiberg qualified his comments by adding that resolution of the so-called “fiscal cliff,” a battle over substantial spending cuts and tax increases for middle and upper income individuals, could benefit banks.
In a research note, Seiberg said the election provides “zero” mandate to determine the fate of Fannie Mae and Freddie Mac, two government-seized housing refinance giants. He added that “even in 2015 it is far from assured that Congress will act on Fannie and Freddie.” This situation is a benefit for mortgage insurers “as their future is tied to the future of Fannie and Freddie,” he said.
The Obama victory will give new momentum to efforts to implement key aspects of the Dodd-Frank Act, written to impose limits on big banks in the wake of the financial crisis, he said.
“A Romney victory could have stopped in their tracks some of unfinished post-crisis rulemakings. With the President re-elected, that barrier is gone,” he said.
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