Fannie Mae (FNMA)

[MannSinger]

$1.5T covered by CRT, Recap=3%of$3.5T=$100B=Warrant


or Recap = 2% of $5T = $100B = Warrant-- Rest is same for both cases.

The government can exercise the warrant to generate $100B and then they can put this $100B as a recap MBS Trust fund.

They can put this $100B of MBS Trust fund in 10 years treasury bond to generate 3% interest.

Then the government can take 1% fee to give $300B LOC which is 3% interest of $100B i.e $3B. Leaving $100B remain in MBS Trust fund forever.

So the government will make $3B per year forever for giving $300B LOC.