Fannie Mae-No Politics (FNMA)

[brandemarcus]

Yank you are distorting the picture with many statements on that post.

1. Reversing Dta's and derivative gains have not been the sole source of income. There is core net interest income of at 20 billion per year even in 2008 and 2009. Most of the derivative effects have been losses. Dta gains in 2013 were just write backs from dta losses in 2008 and 2009 which you have no problem trumpeting. I'll take back the gains from dta's in 2013 , you take back the losses from dta's in 2008 and 2009.


2. So there were a combined 5 trillion in guarantees. The bad loan rate varied between 2% and 6% during the crisis. It was only 2.4% at the end of 2008 as the crisis took time to spread to Main street. Let's use 5% ,so that's 250 billion dollars to deal with.

3. We next have to take the recovery rate as the properties still have value even in foreclosure. Remember also that either the buyer or the mortgage insurance company is responsible for the first 20% of the loss. Let's say they lose 40% on each 250 billion so that's only combined losses of 100 billion combined for Fannie and Freddie.


4. The losses were not all of a sudden on a specific date, they were delayed for all sorts of reasons. There was plenty of time to build up loss reserves from an average of 30 billion per year in net interest income at the companies. Even in 2009 charge-off's per year for Fannie Mae were 33 billion then subtract 15 billion in net interest income in anyone year and that's 18 billion per year. So you need 76 billion in loss reserves or more than 4 years reserves. Come on !


5. This is not rocket science as Timmy G once said. You can understand it , Judge Millet should be able to understand it. Ted Olson should be able to explain it. Hopefully Tim Howard will get a chance to explain it. Quit shifting the goal post we are looking at 2011-2012 , not 2008 here!