Fannie Mae-No Politics (FNMA)

[RickNagra]

GSE Facts

They have paid back 202 billion dollars to the Treasury and were only lent 187 billion.

The taxpayers have made a profit of between 60-80 billion dollars on their bail-out. The "Senior Preferred Stock" that the government owns pays a 10 percent dividend. Not only have the GSEs successfully paid the full amount they have paid in excess of it.

Private label MBS fail at almost 3x the rate of GSE securities.

There are 20 lawsuits from shareholders of Fannie Mae and Freddie Mac against the government pending.

The GSE model is extremely efficient, regardless of the propaganda that you'll read in the media that is being encouraged by bank lobbyists and publicists.

Congress encouraged the GSEs to relax their standards on credit quality and should share a large part of the blame for why they needed a bail-out.

Currently, Fannie Mae and Freddie Mac have never been ran better. Their net failure rate for mortgages that they purchase is under 1 percent. The average loan to value ratio of loans they insure against default is at 70 percent of current home values and that is across their entire portfolio of assets. The average credit score of an insured borrower is 760.

Half the employees have been replaced. Most of the management has been replaced. They have imposed an almost religious discipline in how they operate and those efforts are paying huge. In 2013 Fannie Mae was the most profitable company IN THE ENTIRE WORLD. They recorded the largest 1 year profit of any company in history.

If Fannie and Freddie didn't exist you probably would not have gotten a mortgage after 2008. They control almost the entire market and for good reason. No one can do what they do better.