Fannie Mae-No Politics (FNMA)

[obiterdictum]

I suppose the optimistic view of this; Capuano is trying to make something happen.

Yes. New Congress. New Administration. Freshly made bill.

I think Capuano believes the taking of FnF profits has gone on long enough. Time to stop those payments and let them pay back the original amount over 30 years to make it official. Since technically they haven't paid that amount yet.

Thoughts?

The text of Capuano's new bill is not available so, that bill cannot be assessed. There is no guarantee that the text will be precisely the same as the "Let the GSEs Pay Us Back Act of 2015."

https://www.govtrack.us/congress/bills/114/hr1036/text

Even so, a similar bill was proposed in 2013. Take a look at a close comparison between the 2013 and 2015 bills. Not much difference.

https://www.govtrack.us/congress/bills/114/hr1036/text#compare=293554:ih

Essentially, the Capuano 2015 bill modifies the SPSPAs, ends the net worth sweep, and turns the US Treasury stock investment with dividends into a series of loans with principal calculated by total drawn per year, made before after the modification, at a 5% interest rate to be paid on a unspecified amortization schedule with a 30 year maturity term. Already paid in dividends are treated retroactively as principal and interest paid.

Considering that total draws and total dividends paid are known, what would the loans look like today? That is the first consideration to determine the value of the bill. We cannot know what the amortization schedule will be, but we can go through the motions to calculate principal and interest payment at 5%.

Here are all the draws and dividends. Someone can kindly do the calulations.

Draws Made
https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_1.pdf

Dividends Paid
https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_2.pdf

Finally, the bill does not consider specifically, prepayment, overpayment, accounting changes to be made, the conservatorship, terminating the conservatorship, the other aspects of the SPSPAs, shareholders equity, which under this scenario alters notions of takings and APA violations, the court cases, more, etc. are not taken into any consideration. The bill is a piecemeal approach that does not fully relieve shareholders equity concerns.