Fannie Mae-No Politics (FNMA)

[navycmdr]

timhoward717said:
December 19, 2016 at 4:21 pm

This is extremely positive. Few know just how positive but they will soon.

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Ronsaid:
December 19, 2016 at 1:38 pm

A Bullish Sign for Fannie and Freddie ?
Rep. Mulvaney as Trumps OMB Director ?

By Paul Muolo [e-mail]

President-elect Donald Trumps pick for director of the Office of Management and Budget, Rep. Mick Mulvaney, R-SC, is a positive sign for the future of Fannie Mae and Freddie Mac, according to a new research report from Cowen & Co.

Analyst Jaret Seiberg calls the choice of Mulvaney for OMB chief the most bullish sign yet that the Donald Trump administration will favor a solution to housing finance reform that includes a continued role for Fannie and Freddie.

In particular, Seiberg points to legislation sponsored by Mulvaney (H.R. 4913) that effectively declares the governments senior preferred shares to be repaid and mandates that Treasury covert its warrants into common stock. (At this point, the GSEs would be allowed to retain capital and would be released from their conservatorships once they meet a 2.5 percent capital requirement that eventually grows to 5.0 percent.)

After being taken over in the fall of 2008, Fannie and Freddie became profitable in 2012 and have paid $255.8 billion to the Treasury in the form of dividends versus cash assistance draws of $188.4 billion, a difference of $67.4 billion.

Treasury controls the senior preferred stock. The junior preferred and common continue to trade in the over-the-counter market and through private transactions.

The latter two classes of stock are considered speculative in nature.