Fannie Mae (FNMA)

[cooler_heads]

Looks like the tone has changed on CSS and the market is reacting postivily.

http://seekingalpha.com/article/2579075-the-reason-fannie-and-freddie-shares-are-rising-today?source=google_news

Federal Housing Finance Agency (FHFA) Director Mel Watt gave a speech to the room of bankers that included some anticipated policy changes. Of importance to shareholders, however, was the inclusion of wording regarding the Common Securitization Platform (CSP), which has been under construction for several years. Mr. Watt confirmed what many shareholders believed when he said,
“

"Now, let me turn my attention to the continuing progress we are making in the multiyear process of developing the Common Securitization Platform , which will create a shared securitization infrastructure for Fannie Mae and Freddie Mac. As I announced in May, we are focusing on ensuring that the CSP fills the needs of Fannie Mae and Freddie Mac to carry out most of their current securitization functions. To achieve these objectives, FHFA and the Enterprises have revised the governance structure and operating agreement for Common Securitization Solutions (CSS). CSS is a joint venture owned by both Fannie Mae and Freddie Mac and is the corporate entity that we expect ultimately to house and operate the Common Securitization Platform."

Shares of both Fannie and Freddie began to rally after this statement, due to the fact that markets are now beginning to price in the value of the CSP. If the old Fannie Mae and Freddie Mac were able to produce $23 billion per year in annualized earnings, a bigger and more expansive CSP should be able to beat that, right?

Congratulations to Mel Watt on throwing shareholders some meat in his speech.