Fannie Mae (FNMA)

[NobodyFromNowhere]

RDN Auctioned Mortgage Guarantee Business and Nobody Wanted It!

Had to sell asset guarantee business to raise cash just to support what is left of the company. KKR, Blackstone, Flowers, et. al didn't want it. Shitty business. Too capital intensive. Too many regulations and threats from the Treasury to confiscate all earnings in order to pay the US deficit.

Best news in a month!

See where the private markets are taking us fellas!

Full circle back to FNM and FMC - that is with NYSE tickers.

RDN's earnings are going to fall 50% in 2015 because they are required to hold twice as much capital to do exactly what they have been doing. There's just no profit in the private mortgage insurance business anymore.

That's why this 3% down on a mortgage is complete BS. That requires a company like RDN to insure the 17% between 3% and 20%. Nobody is doing it.

Mel Watt just did that as a gesture, it is meaningless without companies like RDN. The bad thing it does is that it gives Hensarling and Corker ammo to say, Hey look, they are doing it all over again and putting the taxpayer on the hook.

It's all smoke and mirrors. The only reality is the Fannie and Freddie are netting $70 million a day in profits. It takes RDN an entire quarter to make that much money, haha.