Fannie Mae-No Politics (FNMA)

[Markus45]

Conservatorship - Receivership

Hi Zephadiah, thanks a lot for the two links.

If we read carefully then we see the danger:

"...the director may appoint a conservator (or receiver) in cases of insolvency, undercapitalization, operating in an unsafe or unsound condition..."

Take special note: "undercapitalization"

"...However, assuming a statutory ground exists and the Director of FHFA determines that the financial condition of the company requires it, the Director does have the discretion to place any regulated entity, including the Company, into receivership. Receivership is a statutory process for the liquidation of a regulated entity. ..."

Here we can see the problem with the situation that Fannie and Freddy are not able to recapitalize. The FHFA can put the companies in receivership and wind them down. I think this danger is vital and we should keep this in mind.

Thanks again for the two interesting links