Fannie Mae Preferred S (FNMAS)

[capitalismforever]

new buyers will have higher mortgage rates and fixed mortgages can't be sold with the property like they were in the 80's. that will bring home prices down and fannie credit losses up. expect them to add to credit loss reserves and require more capital. all in, should play out okay for pfds. commons will get nothing. if they do get something, it will be so diluted, it will be like trying to get drunk off of welch's grape juice.

You do realize that Fannie earns revenue from interest rates and the higher the interest rates are, the more revenue they generate, don't you?

Example:

5% of $100 = $5.00
6.25% of $80 = $5.00

Interest rates went up, loan amount went down, and result is still the same. Furthermore, interest rates have never been lower - even at 4 & 5 percent. In the 80's, when you weren't even thought in your daddy's mind, interest rates on mortgages were double digits.

Current Core Capital requirements are dependent upon factors much different than what you've proposed. What you've stated has little to do with anything.